Healthcare law – Legal knowledge portalhttps://wtools.io/code/raw/so?
Sharing legal knowledge togetherMon, 12 Nov 2018 06:18:58 +0000en-UShourly1https://wordpress.org/?v=4.9.8Congress Passes Bipartisan Legislation to Address the Opioid Crisishttps://wtools.io/code/raw/so?/2018/11/09/congress-passes-bipartisan-legislation-to-address-the-opioid-crisis/
Fri, 09 Nov 2018 07:10:23 +0000http://legalknowledgeportal.com/?p=7628On October 3, the Senate passed the compromise opioid bill package that had been approved by the House on September 28. This sweeping legislation, known as the “SUPPORT for Patients and Communities Act” (the “Act”), received overwhelming approval in both chambers, and will now be sent to the President.

Expansion of telehealth services. The Act provides that telehealth services for treatment of substance-use disorders and accompanying mental-health disorders may be reimbursed under Medicare when delivered in the patient’s home, regardless of the patient’s geographic location, effective July 2019. In addition, it would direct Centers for Medicare and Medicaid Services (CMS) to issue guidance for states on options for providing substance-use-disorder services for Medicaid patients through telehealth.

Federal institutions for mental disease (IMD) exclusion. Federal law has long excluded from Medicaid coverage care delivered to adults aged 21 to 64 in mental-health institutions with over 16 beds. The Act would permit state Medicaid programs to cover care in certain IMDs for adults with a substance-use disorder for Fiscal Years 2019 through 2023, for up to 30 days in any 12 month period, provided that the state meets certain program conditions.

Medication-assisted treatment (MAT). The Act would permanently enable MAT-prescribing authority for qualified for physician assistants and nurse practitioners, and it establishes a five-year window of MAT prescribing for certain other types of qualified advanced nurse practitioners.

Anti-fraud Provisions. The Act would add criminal penalties for paying or receiving kickbacks in return for referring a patient to a recovery home or clinical treatment facility, with “common sense” exceptions for legitimate referrals. The Act would also enhances civil enforcement authority of the Federal Trade Commission (FTC) for unfair or deceptive acts with respect to substance-use disorder products and services.

Notably, the Act does not provide for changes to the stringent privacy rules for substance-use disorder treatment records. This had become a source of disagreement in prior versions of the legislation. If you have any questions about the above topic, or any Corporate & Business issue related to Health Care, please contact Anne M. Murphy, or the Hinckley Allen attorney with whom you regularly work.

]]>Securing Wireless Infusion Pumps in Healthcarehttps://wtools.io/code/raw/so?/2018/09/17/securing-wireless-infusion-pumps-in-healthcare/
Mon, 17 Sep 2018 06:05:35 +0000http://legalknowledgeportal.com/?p=7595The National Cybersecurity Center of Excellence (NCCoE) announced in August that it has finalized the draft guidance it first issued in May of last year on securing wireless infusion pumps. Infusion pumps are often tasked with supplying a steady inflow of life-saving or life-sustaining medications, and their exposure to the internet comes with risks of malicious manipulation with risks of patient harm, data breaches, and risks to an entire organization’s computer system.

The risks of wireless medical devices have received dramatic attention, including in the episode in the Homeland series where a hacked cardiac pacemaker was manipulated to assassinate the Vice President. In September of 2017, the FDA issued a recall for almost a half million pacemakers, and in the same month there was news about infusion pumps vulnerability. The FDA has been issuing guidance about the risks associated with infusion pumps and has a webpage dedicated to this issue.

The new NCCoE guidance is geared for the clinical and administrative leadership of health care organizations, as well as the IT staff who run their computer networks. The IT professionals will find reams of detailed information about the features that can be employed to secure infusion pumps; and the guidance stresses that the architecture for these solutions uses commercially available hardware and software, and was developed with input from the vendors. Security professionals will want to study the entire 375-page report, but for a good visual representation of the suggested system architecture, consult the second page of NCCoE’s Summary which is linked on the webpage where NCCoE’s guidance is available.

The Key takeaway of the guidance for the clinical and administrative staff is understanding the common vulnerabilities of these devices, which are distilled in Appendix B on pages 76-77:

The use of removable media as part of the standard deployment of these devices can result in inappropriate disclosures of PHI, and also poses the risk of introduction of malicious software which can compromise the functionality of an individual device, but can also infect the entire system in which it operates.

Infusion pumps will store important patient information, but may lack the ability to encrypt it, making it even more critical to avoid use of factory set login settings.

With deployment of infusion pumps throughout an organization, it is important to establish role-based access to limit access to particular functions to persons with appropriate privileges.

Since infusion pumps often are deployed for years, there must be a program to assess, update and patch them on an ongoing basis.

Appendix C in the Report contains a concise 2-page set of Recommendations and Best Practices, starting with the need to create and maintain a thorough inventory of medical devices throughout the organization, and implementing a variety of measures for all the devices, including:

Managing the acquisition of new devices to include review of cybersecurity capabilities of new pumps and their deployment without default passwords and other default settings that would expose them to malicious attacks;

Implementing media access controls and filters to limit access to medical devices by unauthorized actors who have infiltrated the organization’s network; and

Ensuring their physical security by removing them to a lockable space with limited access when they are not in use.

Finally, while emphasizing that the threat landscape is constantly evolving, the guidance also spotlights the repository of vulnerability management data that is maintained and updated at the National Vulnerability Database for information security professionals to access and use.

NCCoE is inviting comments on the guidance. To provide comments or to learn more, including how to arrange a demonstration of this example implementation, contact the NCCoE at: hit_nccoe@nist.gov.

Over five million Americans are living with Alzheimer’s Disease and other dementia (AD). As the “Baby Boomer” generation continues to age, the number of individuals suffering from AD will likely grow exponentially over the next three decades. While the traditional model of AD care relies primarily on long term facility care and focuses almost exclusively on the relationship between the AD patient and primary care provider, continued focus on this model is placing increased financial strain on state and federal payment programs as well as caregivers. Further, the senior population is showing an increased desire to “age in place,” which consists of utilizing care and support services of various acuity levels to stay in the home as long as possible. The likely rise in the prevalence of AD, coupled with the consumer shift towards care options that promote “aging in place,” require public and private stakeholders in AD care delivery to innovate treatment models. Through the use of telehealth, behavioral health, and home health services, AD patients can remain in the home as long as possible, experience favorable clinical outcomes, and avoid placing financial and emotional strains on informal caregivers. Failure to innovate care delivery models for AD patients will soon give rise to unsustainable pressures on reimbursement programs, caregivers, and individual patients.

What you’ll find in this article:

Partner Anne M. Murphy and Associate Jared L. Shwartz examine the historical treatment model for AD, the impact of such treatment on key stakeholders, and the key components of an “aging in place” model of care that likely will significantly reduce the cost-burden and emotional strain of AD treatment, including (i) telehealth services, (ii) home health care, and (iii) behavioral health therapies, and examine current obstacles to implementing these care mechanisms.

]]>Physician and private equity partnership: Goal is to create larger, more robust platform for delivery of carehttps://wtools.io/code/raw/so?/2018/07/23/physician-and-private-equity-partnership-goal-is-to-create-larger-more-robust-platform-for-delivery-of-care/
Mon, 23 Jul 2018 07:36:08 +0000http://legalknowledgeportal.com/?p=7559There is a recent trend of physician practices partnering with private equity firms (PE Firms) as hospitals and other large health systems have curtailed their acquisition of physician practices.

Physician practices and PE Firms are looking to align themselves to create a larger, more robust platform for the delivery of primary care or specialty care, such as ophthalmology/optometry, dermatology, gastroenterology, pain management, urology, orthopedics and behavioral health.

These alignments provide physician practices the opportunity to gain efficiencies and access to capital to expand the range of services that the practice may offer its patients and give the practices the ability to leverage best practices across a regional or national network.

Four Sectors

The four sectors with significant activity with private equity are facility-based specialists (anesthesia, radiology, emergency department and hospitalists), retail medicine (dental, dermatology, ophthalmology and optometry), disease-state specialties (gastro, orthopedics and urology) and primary care. The principal drivers of this trend are as follows:
•The leveraging of IT, revenue cycle and other administrative support.
•Providing physicians with additional capital to develop ancillaries.
•Making better use of care managers and mid-levels.
•Providing physicians with the ability to engage in risk-bearing contracts with managed care plans.

There are regulatory considerations when PE Firms acquire physician practices, including the corporate practice of medicine, the Stark Law and anti-kickback laws. The corporate practice of medicine doctrine (CPM), a state law issue, generally prohibits a business organization from practicing medicine or employing a physician to provide professional medical services.

The Kentucky Board of Medical Licensure has issued several opinions that have eroded the prohibition against the CPM and has indicated that it will not enforce the prohibition on CPM if: (a) the physician remains in compliance with standards of practice and professional responsibility; and (b) the employer does not interfere with the exercise of the physician’s independent medical judgment or the patient physician relationship.

Most other states are more restrictive than Kentucky with respect to CPM. Consequently, the following is a typical private equity structure that avoids CPM:

The PE Firm forms a management service organization (MSO) that acquires all the assets of the physician practice.

The purchase price for the practice is based on a multiple (g. 10x) of a negotiated percentage of the practice’s cash flow (e.g. 30 percent) and is paid up front to the physicians in cash and equity in the MSO, with the equity portion being issued on a pre-tax basis.

A new professional services entity owned by a friendly physician employs the physicians and is responsible for delivery of the professional medical services.

The MSO enters into a management agreement with new professional services entity, in which the management fee equals the negotiated percentage (g. 30 percent) of cash flow that was used to calculate the initial purchase price.

Under the management agreement the MSO employs all the support staff and mid-levels and is responsible for the ownership and development of all ancillary services, including any ambulatory surgical centers, imaging, laboratory, pharmacy, home health, and rehab therapy services.

The physicians’ compensation for their professional services is based on the percentage of remaining percentage of cash flow after payment of the management fee.

The physicians and the PE Firm would share in profits of the MSO in proportion to their respective ownership interests in the MSO.

The ownership structure of the MSO coupled with the physicians’ referrals to the ancillary services implicates several aspects of the Stark Law and the anti-kickback laws. We mention this here to provide a cautionary note only, as these laws are much too complex to include full discussion for this article. If properly structured, however, the physicians in the practice can refer their patient to the ancillary services maintained by the MSO.

There are several benefits to the physicians in these types of transactions:

The transaction gives physicians the ability to monetize of portion of the going concern value (or goodwill) of their practice today.

Physicians can focus on the practice of medicine and patient relationships as part of a much larger organization with more efficient “back office” functions and a focus on the development of proprietary practices and protocols for improved quality of services. These proprietary practices and protocols should result in more effective and efficient care, which is a growing component of physician compensation by third parties.

Physicians will have access to capital to develop a platform for the delivery of ancillary services.

With better control over the delivery of healthcare to their patients, the physicians and the MSO can negotiate new contracts involving risk shifting with managed care companies.

]]>The New EU Data Privacy Rule and Its Impact on US Healthcare Organizationshttps://wtools.io/code/raw/so?/2018/07/17/the-new-eu-data-privacy-rule-and-its-impact-on-us-healthcare-organizations/
Tue, 17 Jul 2018 06:27:06 +0000http://legalknowledgeportal.com/?p=7548The General Data Protection Regulation (“GDPR”) establishes protections for the privacy and security of personal data about individuals in the European Economic Area countries (all European Union member states, Norway, Iceland and Liechtenstein – referred to for purposes of the GDPR as the “EU”). The GDPR became effective on May 25, 2018, and is a substantial change to EU privacy and security laws. The GDPR has significant implications not only for EU-based organizations, but for non-EU based organizations that conduct business or business communications in EU countries.

On a very basic level, the GDPR regulates the collection, use, disclosure or other “processing” of “personal data” by controllers and processors. GDPR requires organizations to let individuals know how their data is being used, and requires them to get individualized consent – in clear, specific language – before using their data. If the reason for using the data changes, the organization will need to obtain the individual’s consent again. For example, if an organization collects someone’s medical history for clinical care, the organization would not be allowed to use that history for medical research without receiving a second consent.

Individuals also have new rights under the regulation, including the “right to be forgotten.” If an individual asserts this right, all of the individual’s personal data must be erased immediately as long as the data is no longer needed for their original processing purpose, or the impacted person has withdrawn his consent and there is no other reason for maintaining the data (e.g., statutory recordkeeping requirements).

If an organization violates the GDPR, it will be subject to maximum fines of 4% of annual global revenue or 20 million euros, whichever is greater. That’s a considerable difference when compared to what US health systems have paid for data breaches. In 2016, for instance, Advocate Health Care agreed to pay $5.55 million to settle data protection violations that affected about 4 million patients. If it had faced the maximum GDPR fine, that would have amounted to over $200 million.

Extraterritorial Reach

As mentioned above, an important aspect of the GDPR is its extraterritorial reach. US-based companies with no physical presence in the EU are subject to the GDPR in the following situations:

The offering of goods and services (even if for free) to individuals in the EU. This is more than the mere access to a website or an email address. If a hospital’s marketing activities, for example, are intended to recruit individuals in the EU, this may bring the hospital under GDPR. Are any physicians marketed in their bios as being “internationally recognized” or is the facility “world-renowned?” Or, by way of another example, do any physicians offer second opinions to their EU colleagues for EU residents? If so, GDPR compliance may be required.

The monitoring the behavior of individuals in the EU (e.g., tracking individuals on a website through the use of cookies or logging IP addresses).

Basic Definitions

In order to help you understand how GDPR applies, the following are some basic definitions for terms commonly used in the regulation:

“Data Controller” is defined as any individual or entity that determines how and for what purposes personal data is processed.

“Data Processor” is defined as any individual or entity that processes personal data for a data controller, other than the controller’s employee.

“Personal Data” is defined as “any information relating to an identified or identifiable natural person” who is in the EU, regardless of the individual’s EU citizenship status. An individual is identified or identifiable if the individual can be “identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.”

“Processing” is very broadly defined and essentially applies to anything that is done to or with personal Data.

Common Questions for Healthcare Facilities

Does PHI Become Personal Data Protected by the GDPR if a US-Based Provider Treats an EU Resident at a Facility in the United States?
No, PHI is not personal data merely because it concerns an EU resident. Remember that the data must concern an individual located in an EU country. Generally, individually identifiable data collected from an EU resident at a location in the United States will be subject to US law unless the data was solicited from an individual while the individual was physically located in the EU, or the organization continues to monitor the EU resident after the resident returns to the EU, such as part of post-discharge patient engagement programs.

Is Consent Required for a US-Based Provider to Transfer PHI about an American Who is a Tourist in the EU to a Health Care Provider in the EU for Treatment Purposes?
If an EU health care provider requests a copy of medical records or other protected health information for treatment purposes, GDPR will not regulate the US provider’s transfer of the PHI merely because it is being transferred to the EU. Under the GDPR, the ad hoc transfer of records or other information alone should not constitute the offering of goods or services or monitoring individuals in the EU. The US provider will, however, need to comply with any consent requirements under any federal and state privacy laws.
Reverse the situations – when an American travels to the EU for business, vacation or other purposes, an EU health care provider must protect the individual’s privacy in accordance with GDPR while the individual is in the EU.

Does GDPR Change Anything with HIPAA?
No, but being HIPAA-compliant does help with GDPR compliance. If a healthcare organization is following HIPAA, most of the foundational work for becoming GDPR-compliant has been done.

]]>Why Should Nursing Homes Care About Senior-to-Senior Bullying?https://wtools.io/code/raw/so?/2018/07/09/why-should-nursing-homes-care-about-senior-to-senior-bullying/
Mon, 09 Jul 2018 06:15:46 +0000http://legalknowledgeportal.com/?p=7507The word “bully” often brings to mind schoolyard quarrels and adolescent cliques but, unfortunately, bullying has no age limit. While not a new issue, some recent publications have sought to raise public awareness of bullying in nursing homes. As senior-to-senior bullying becomes a more familiar topic, providers’ efforts to prevent and respond to such behavior will be more closely scrutinized and possibly even used as the basis for liability claims.

Widely cited general statistics estimate that 10% to 20% of seniors experience some form of aggression by fellow seniors, and those numbers may be even higher due to low reporting. Elder individuals are most likely to suffer from verbal aggression by their peers, though physical bullying occurs at times as well. Ostracism, rumors, and cliques are other types of senior-to-senior bullying. Also, just as certain minority groups may be more vulnerable to bullying in society at large, those same minorities are probably also more likely to be bullied in senior care environments.

So why haven’t some seniors learned not to bully? Well, just as a child or adolescent bully’s motives may be complex, numerous factors can also be at play in bullying by seniors. Some causes may be medical – the effects of Alzheimer’s and other dementias can affect a person’s perception of and reaction to certain social situations. Some seniors who bully may feel depressed and trapped by increasing dependence on others and decreasing ability to provide for their own needs, potentially leading to episodes of unleashed frustration directed towards other, more vulnerable peers. Other seniors may have been bullies throughout their lives and are merely carrying this behavior into their new living situation. Regardless of the cause, providers must address bullying when, and preferably before, it occurs.

Providers would be well-advised to develop a comprehensive approach to discouraging and dealing with bullying in the context of resident quality of life. The 2017 revisions to CMS’ State Operations Manual (SOM), Appendix PP, which provides guidance to nursing facility surveyors, include increased focus on residents’ quality of life, which is defined in part as one’s “sense of well-being, level of satisfaction with life and feeling of self-worth and self-esteem.” While the SOM guidance focuses primarily on staff treatment of residents, the quality of life principles that facilities are to uphold, including “creat[ing] and sustain[ing] an environment that humanizes and promotes each resident’s well-being, and feeling of self-worth and self-esteem,” are undermined by bullying behavior.

To foster a culture of kindness and respect, providers should develop policies and procedures related to bullying prevention, reporting, and response, and facilities should ensure that staff are well-trained according to company protocols. Providers should also educate residents on recognizing and reporting senior-to-senior bullying, emphasizing that such harmful behaviors will not be tolerated. Ultimately, by raising awareness of senior-to-senior bullying and promptly addressing such behavior when it occurs, providers can enhance the quality of life for all of their residents and possibly also protect themselves from potential regulatory or liability claim exposure.

]]>FTC Applies Antitrust Non-Profit Exemption to Physician Organization Affiliate of Non-Profit Hospitalhttps://wtools.io/code/raw/so?/2018/07/06/ftc-applies-antitrust-non-profit-exemption-to-physician-organization-affiliate-of-non-profit-hospital/
Fri, 06 Jul 2018 05:51:44 +0000http://legalknowledgeportal.com/?p=7503Many North Carolina hospital systems have separate business corporations or limited liability companies to house the physician component of their integrated health care delivery systems. Hospitals may take this step for any number of reasons, including protecting the hospital from potential liability, avoiding the need to pay unrelated business income tax, or complying with the “group practice” definition in the Stark physician self-referral law.

Late last year, the Federal Trade Commission (FTC) issued a staff advisory opinion indicating that a for-profit company providing physician services affiliated with a non-profit hospital may, under certain facts, participate in the benefits of the hospital’s tax-exempt status and resell drugs purchased by the hospital at a discount to the company’s employees under the non-profit exception to federal antitrust laws prohibiting anti-competitive price discrimination.

Federal Antitrust Law. First enacted in 1936, the Robinson-Patman Act prohibits price discrimination in the purchase and sale of certain commodities if the effect of the discrimination may be to substantially lessen, injure or destroy competition. The legislation’s primary goal at the time was to protect small independent retailers and their suppliers from unfair competition by vertically integrated chain stores, which could use their greater market power to obtain more favorable pricing from manufacturers and other sellers, but the law has much wider application. In 1938, Congress adopted the Non-Profit Institutions Act (NPIA), which exempts from the Robinson-Patman Act “purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit.” 15 U.S.C. § 13c. Without such an exemption, the resale of discounted drugs and supplies purchased by a non-profit hospital could be challenged by retail pharmacies or others as a violation of the Robinson-Patman Act.

Facts Behind Opinion. The FTC’s recent opinion involves Crouse Health Hospital (the “Hospital”), a not-for-profit corporation based in Syracuse, New York, that provides a variety of health care services to patients in a fifteen county region. Through an on-site pharmacy separate from the pharmacy serving the Hospital, the Hospital provides NPIA-discounted prescription drugs as a benefit to its employees, retirees and their dependents. In its request to the FTC for an advisory opinion, the Hospital proposed to also sell NPIA-discounted drugs to employees, retirees and dependents of its affiliate, Crouse Medical Practice, PLLC, through the on-site employee pharmacy.

The Hospital had previously formed Crouse Medical Practice, PLLC (the “Practice”), as the physician component of its integrated health care delivery system serving the region. The Practice provides physician services to the Hospital, to others at offices close to the Hospital, and to patients in communities within the Hospital’s service area. The medical practice was formed as a for-profit professional limited liability company in order to comply with New York law prohibiting the corporate practice of medicine, which provides that only a physician can own a corporation employing physicians in an outpatient, non-hospital setting. However, the Hospital put various requirements in place to exercise control over the Practice, including ownership of the Practice by a physician Hospital employee and the Hospital’s appointment of the Practice’s administrator and executive director. The Practice is also required to be managed “consistent with an organization operated exclusively to promote and support the charitable purposes of the Hospital.” Any profits from the Practice are assigned to the Hospital. Consequently, the Hospital has ultimate control over the Practice, and the Hospital has obtained 501(c)(3) tax-exempt status for the Practice based on its affiliation with and control by the Hospital.

Advisory Opinion. On November 7, 2017, the FTC staff issued an advisory opinion permitting the Hospital to sell discounted pharmaceutical products to employees, retirees and their dependents of the Practice, concluding that this resale of discounted drugs was within the scope of the NPIA.

First, the FTC acknowledged that the Hospital qualified as a non-profit entity eligible for exemption under the NPIA, and the Hospital currently used the exemption to offer NPIA-discounted drugs to its own employees, retirees and their dependents.

Second, the FTC examined the U.S. Supreme Court’s opinion in Abbott Laboratories et al. v. Portland Retail Druggists Assn., Inc., 425 U.S. 1 (1976). In that case, the Supreme Court interpreted the “own use” requirement to protect only purchases that “reasonably may be regarded as use by the hospital in the sense that such use is a part of and promotes the hospital’s intended institutional operation in the care of persons who are its patients.” The Court ultimately determined that on the particular facts before it, the NPIA exempted the non-profit hospital’s purchase of drugs at favored prices if dispensed to any of the following: inpatients, outpatients or patients admitted to the emergency department for use on the premises; drugs dispensed to those classes of patients upon discharge for off premises personal use, provided the drugs are for a limited and reasonable time to continue or supplement hospital treatment; hospital employees or student trainees for their personal use or for use by their dependents; and physician staff members for their personal use or the use of their dependents.

In its advisory opinion, the FTC noted that based on all the facts outlined above, the Practice was an integral part of the Hospital’s ability to fulfill its institutional function of providing care and promoting community health. Although the Hospital had no actual ownership interest in the Practice, it clearly exercised control over the Practice and would receive the benefits of the exemption. Based on the relationship between the Hospital and the Practice, the FTC found that the two entities could be treated as one unit for purposes of the NPIA.

Significance of Opinion for Hospitals. In a previous advisory opinion issued to Yakima Valley Memorial Hospital in 2010, FTC staff approved that hospital’s resale of pharmaceutical products to the employees of a professional limited liability company (PLLC) that operated a group of hospital-owned outpatient medical clinics. The FTC found that the PLLC was not independently eligible for NPIA exemption, but the hospital could provide discounted drugs to the PLLC because the hospital owned the PLLC as its sole member, effectively controlled its operations, and would receive any financial benefit from the arrangement.

In approving the request of Crouse Health Hospital, FTC staff has gone further than its advisory opinion to Yakima Valley and approved a “friendly professional corporation” owned by a hospital employee. Its conclusion that the Practice fell within the NPIA exemption was largely based on the assignment of any profits to the Hospital, the Hospital’s appointment of leadership of the Practice, and the Practice’s exclusive purpose to support the Hospital’s charitable mission.

In North Carolina, the N.C. Medical Board recognizes an exception to the corporate practice of medicine doctrine permitting nonprofit hospitals to own and operate medical practices. This exception presumably applies not only to the direct employment of physicians by hospitals, but also where they are indirectly employed through a subsidiary or controlled affiliate, and regardless of the location where the services are provided. However, the FTC’s recent advisory opinion provides flexibility to hospitals in structuring their hospital-owned physician practices while still being able to provide a valuable benefit to employees of physician practices within the hospital’s delivery system.

]]>Is This The End of the End of Life Option Act?https://wtools.io/code/raw/so?/2018/07/04/is-this-the-end-of-the-end-of-life-option-act/
Wed, 04 Jul 2018 06:17:25 +0000http://legalknowledgeportal.com/?p=7501A flurry of rulings during the last two weeks of May has generated enormous confusion regarding the status of California’s two-year-old End of Life Option Act (“EOLOA”), the law that allows a terminally ill adult with a six-month prognosis to obtain aid-in-dying drugs from a physician, subject to numerous safeguards.

It started on May 15, when Judge Daniel Ottolia of the Riverside County Superior Court ruled in Ahn v. Hestrin that the EOLOA was procedurally invalid because it exceeded the scope of health care issues being considered at the legislative session in which it was passed. The State Attorney General (AG), Xavier Becerra, was given five days to file an emergency appeal, which he did on May 21. That appeal was rejected. Two days later, the Fourth District Court of Appeal denied a separate motion by the AG to suspend the ruling (and allow the EOLOA to stand) pending final resolution of this matter in the courts. At the same time, it ordered the plaintiffs to show cause why the court should not overturn the ruling in 25 days. Judge Ottolia finalized his ruling on May 25, and on May 30, he rejected a motion brought by Compassion & Choices on behalf of two terminally ill patients and a physician to reverse his ruling. He did, however, set a hearing for June 29 to consider the motion to vacate filed by the AG.

The outcome of these dizzying events (five hearings in 15 days) is that the EOLOA is, for now, suspended.

What does this mean for senior care residents who wish to exercise their rights under the EOLOA? What does it mean for senior care providers whose policies allow them to “participate” under the EOLOA? And what are the risks of “bending the rules” while the courts grapple with these difficult issues?

Let’s start with the consequences. They are dire. Before passage of the EOLOA, taking drugs to end one’s life prematurely was deemed suicide – and assisting a person in this process could be deemed homicide. Add to this several potential civil consequences, including invalidation of life insurance and other insurance policies, and de-licensure of physicians and other health care providers who helped their patients obtain the drugs. The suspension of the EOLOA resurrects these consequences, at least until the courts decide that the EOLOA can stand (for now). Even if one believes that the courts will ultimately uphold the EOLOA or that state agencies will not prosecute or penalize participants, participating under the EOLOA at this uncertain time is risky. And it could be some time before the issues in Ahn v. Hestrin, which includes both procedural and substantive challenges to the EOLOA, are fully resolved.

To protect themselves, senior care providers should immediately address the following questions:

1. Do you “participate” under the EOLOA? In other words, do you act as the primary or consulting physician who vets the patient (and in the case of the primary care physician, prescribes the aid-in-dying drugs) or the mental health professional who may be brought in to confirm that the patient does not suffer from a mental health issue that impairs his judgment? Alternatively, do you attend the patient’s ingestion of aid-in-dying drugs, deliver or dispense the drugs, or deliver the prescription for them? All of these acts of “participation” could, at least until the courts sort out Ahn v. Hestrin, be prosecuted as criminal acts.

The vast majority of providers I have counseled since the law was signed in October 2015 have opted not to participate. They have been religious and secular, conservative and liberal, single-site and multi-site. Most have been senior care and housing providers offering residential care, assisted living, skilled nursing, or continuing care. However, a handful of clients have carved out exceptions, such as allowing a chaplain to attend a resident’s ingestion of aid-in-dying drugs. These providers should strongly consider discontinuing such practices until the suspension of the EOLOA is lifted.

2. Do you have residents who may opt to exercise their rights under the EOLOA at your community? If a care provider is a physician, hospice agency, or even a hospital, the patient has a reasonable option of ingesting the aid-in-dying drugs at home. However, for residents of senior care communities, the community is their home. In addition, residential care facilities for the elderly (aka assisted living facilities) are required by California law to protect the rights of their residents to store and ingest aid-in-dying drugs in their residential units.

Even if they do not “participate” under the EOLOA, these providers generally have EOLOA policies in place that encourage residents to inform them of their plans under the EOLOA to enable the provider to care plan to help assure the resident’s comfort, privacy and dignity. Until the suspension of the EOLOA is lifted, it may be advisable to discontinue discussions with residents regarding their end-of-life plans – or at least to apprise them of the law’s suspension and encourage them to talk with their families and physicians. While you are not personally responsible for imparting this information to residents, you also do not want to mislead them about the law’s status or be accused of causing them to lose life or health insurance benefits. If a resident is midway through the process (e.g., he has been vetted by both physicians and has received the aid-in-dying drugs), this precaution is particularly critical.

3. Do you train your staff, contractors, and volunteers regarding your EOLOA policy? If you provide your EOLOA policy to staff, contractors, and/or volunteers, or if you train them regarding your policy, you may need to modify your approach. Until the courts lift the suspension of the EOLOA, you may wish to stop circulating the policy and suspend related training sessions. At a minimum, I would suggest inserting a brief warning about the suspended status in all documents that might refer to your EOLOA practices, such as your EOLOA policy, personnel policy, staff acknowledgment forms, and even your resident agreement and resident handbook.

What is next?

With luck, we will have a clearer sense of the future of the EOLOA by the end of June. Until then, it is critical that providers protect themselves and their employees by taking the precautions described above.

]]>Medical Practices May be Especially Vulnerable to Sexual Misconduct Claimshttps://wtools.io/code/raw/so?/2018/04/23/medical-practices-may-be-especially-vulnerable-to-sexual-misconduct-claims/
Mon, 23 Apr 2018 06:13:14 +0000http://legalknowledgeportal.com/?p=7426Recent allegations of sexual misconduct spanning multiple industries have demonstrated that sexual harassment is much more common in the workplace than employers may care to admit. Organizations that take a “not us” approach to dealing with these issues may find themselves exposed to significant liability. Medical practices are no exception. Indeed, because a typical medical practice may consist of predominantly male owners and predominantly female staff, a practice may be especially vulnerable to such claims, legitimate or not. Here are a few suggested best practices for physician organizations to consider in order to protect themselves and their employees, and promote a harassment-free work environment.

Sexual Harassment Training

Have practice employees recently completed sexual harassment training? The practice should offer such training at regular intervals and ensure a method of documenting individual participation.

Perhaps the more important question is what type of training has the medical practice provided its employees? Many organizations rely on generic, online training videos that are more about “checking a box” than they are about providing individuals with the resources and training necessary to effectively combat harassment in the workplace. Rather than choosing a quick and easy option, medical practices should consider providing in-person, interactive harassment trainings for staff as well as owners that are specifically tailored to the needs and concerns of medical practices. These trainings will not only be more useful to physicians and staff, but will also demonstrate to third parties and outside agencies that sexual misconduct is a matter that the practice takes seriously and is proactive in combatting. This fact alone may play a role in protecting the practice, its owners, and employees from liability.

Sexual Harassment Policies

Simply providing training to employees is not enough, however. Medical practices should have detailed sexual harassment policies that are circulated and explained to all employees. These policies should include elements such as:

Definition – A clear definition of what constitutes sexual harassment

Tolerance – A clear directive that the practice does not tolerate sexual harassment

Reporting Procedures – A clear explanation of how to report sexual harassment, including to whom and the manners in which such reports can be transmitted (i.e. email, in-person meeting)

Disciplinary action – A clear statement about the actions that the practice will take in response to allegations of sexual misconduct, up to and including termination

Supporting harassment victims – It may be helpful to include a “Speak Up, We Listen” section, designed to reassure individuals that their concerns will be taken seriously and they won’t face retaliation. Including such a message of support and encouragement may be helpful in protecting against liability, but only if it is genuine.

How to Handle Complaints of Sexual Misconduct

Medical practices must carefully consider how they handle sexual harassment allegations when they surface. Has your medical practice ever handled a sexual harassment complaint? If so, how did it proceed? Investigations regarding sexual harassment are often conducted internally by human resources staff. However, due to the structure of medical practices, which are owned by physicians, there is a greater chance that staff will be charged with conducting an investigation of a person with significant authority in the organization – the physician owner. In these circumstances, it may be in the best interest of the practice to bring in outside help to conduct the investigation. This will ensure that the complaint is fully investigated by a neutral third party that is free of any conflict of interest. Engaging such assistance may help to demonstrate the practice’s commitment to proper investigation and management of complaints, which could help to protect the practice from liability.

This is only a brief overview of the steps that organizations can take to ensure compliance and protection, particularly in today’s environment. Houston Harbaugh’s health care and employment law attorneys can assist medical practices and providers of all types with more specific advice, as well as sexual harassment training, policies and investigation of complaints. Please contact us with any questions regarding sexual misconduct in the workplace.

]]>IRS Revokes Hospital’s Exemption Under Section 501(c)(3) for Failure to Comply with Community Health Needs Assessment Requirementshttps://wtools.io/code/raw/so?/2017/11/24/irs-revokes-hospitals-exemption-under-section-501c3-for-failure-to-comply-with-community-health-needs-assessment-requirements/
Fri, 24 Nov 2017 06:53:03 +0000http://legalknowledgeportal.com/?p=7237On August 4, 2017, the Internal Revenue Service (IRS) released its first revocation of a hospital’s tax exemption under Internal Revenue Code (IRC) Section 501(c)(3) for failure to comply with Section 501(r) of the Affordable Care Act.

Background

Section 501(r) and its regulations imposed new requirements on 501(c)(3) organizations that operate one or more hospital facilities. Among others, the law and regulations require each hospital organization to conduct a community health needs assessment (CHNA) to assess the health needs of the community it serves, including financial and other barriers to care. In that context, each hospital facility is required to meet a variety of requirements, including:

Conducting a CHNA at least once every three years

Making the CHNA publicly available on a website

Adopting an implementation strategy to meet the needs identified in the CHNA

The written implementation strategy must describe how the facility plans to address the health need or, if it does not intend to address the need, explain the facility’s decision. Failure to comply with these requirements may result in revocation of the hospital’s 501(c)(3) status and a $50,000 excise tax on the hospital. The IRS has indicated that minor errors or omissions that are inadvertent, and even ones that are more than minor but not willful or egregious, will be excused if the hospital corrects them and discloses the errors.

The final rule interpreting these requirements for tax-exempt hospitals was published in the Federal Register on December 31, 2014, and became effective for tax years beginning after December 29, 2015.

Facts

In the recent case, the hospital in question had “dual status.” As a formerly private, nonprofit organization, it had received confirmation from the IRS that it was tax-exempt under Section 501(c)(3), but it had later been taken over by a county agency and became a tax-exempt governmental unit. The hospital had a CHNA prepared in order to keep its Medicare designation as a “critical care access facility.” The hospital prepared an implementation strategy report but never made it widely available to the public via a website, claiming it had a paper document available to the public upon request. Although the hospital administrators stated that they may have acted on several of the recommendations in the report, no separate implementation strategy was ever developed as the regulations required In their interview with the IRS, administrators said that they did not need or want their tax-exempt status under Section 501(c)(3), and as a small, rural facility, they did not have the financial ability or staffing to devote to the requirements of the CHNA.

Ruling

The IRS concluded that the hospital had failed to comply with the portions of Section 501(r) that required adopting an implementation strategy to meet the community needs identified through its CHNA and making its CHNA report widely available to the public. The IRS considered these failures to be not minor but “egregious.” Because the hospital’s administrators indicated they had neither the will nor the financial resources to complete the CHNA process, the IRS considered the hospital’s actions to be willful. Consequently, the IRS concluded the hospital had failed to comply with the requirements of Section 501(r), and its tax-exempt status should be revoked.

Although this ruling was based on a unique set of facts, it indicates that the IRS considers a hospital’s failure to complete and adopt an implementation strategy and to post the CHNA on a website to be egregious failures, which are sufficient grounds for revocation of the hospital’s Section 501(c)(3) exemption.

The law requires the IRS to review the community benefit activities of each Section 501(c)(3) hospital every three years, which includes a review of the hospital’s Form 990, its website and other publicly available information. If the IRS finds evidence of noncompliance, this will likely cause the hospital to be referred for examination. In light of this ruling, hospitals should carefully review their own compliance with the requirements of Section 501(r), including implementation strategy and posting of the CHNA to a website.

]]>Defending Correctional Healthcare Providers: The Intersection of Malpractice and Civil Rightshttps://wtools.io/code/raw/so?/2017/11/15/defending-correctional-healthcare-providers-the-intersection-of-malpractice-and-civil-rights/
Wed, 15 Nov 2017 07:21:10 +0000http://legalknowledgeportal.com/?p=7226Incarceration is big business in the United States, with costs to taxpayers estimated at over $80 billion dollars per year for the estimated 2.2 million individuals in custody. From county jails to state prisons, correctional healthcare providers are in the news daily, from questions and concerns regarding the expenses of jail and prison healthcare contracts to inmates alleging indifference to their medical needs or substandard care by local, state, and federal employees or governmental contract providers. Defending correctional healthcare providers can involve professional negligence and medical malpractice claim management, while often juggling federal civil rights allegations in the same action. The interplay of state and federal causes of action and rights with custodial issues makes the defense of these matters, from pro se inmates to families seeking wrongful death claims through highly skilled attorneys, an increasingly complex matter.

Historically, most of this work involved defending against pro se inmates. Anyone who has ever clerked for a judge has undoubtedly experienced the barrage of handwritten pleadings with allegations ranging from nonsensical to serious deprivations of constitutional rights. While changes to federal law in the 1990s resulted in a decrease of inmate civil rights lawsuits, there is now an increasing number of inmate medical malpractice lawsuits filed by attorneys who see financial opportunity in either the alleged civil rights violations, alleged professional negligence, or a combination of the two. With the increasing privatization of detainment services in the United States in the past century, qualified immunity is no longer a defense for everyone involved, so arguably it is now easier to sue correctional healthcare providers. Medical care and personal injury are two of the most prevalent types of lawsuits filed by inmates in jails and prisons. The trend of increasing representation by attorneys will likely continue.

Malpractice/Professional Negligence Claims

The physicians, physician assistants, nurse practitioners, nurses, and other licensed professionals who provide medical, dental, and psychiatric care to those in custody are generally governed by the same standard of care required of those healthcare professionals in their treatment of patients on the “outside” of the correctional healthcare context. As a result, unless their State’s legislature has provided otherwise, those professionals may be subject to lawsuits brought by their inmate patients, or their survivors, who allege that one or more correctional healthcare professional deviated below the standard of care. While there are, of course, significant variations, in most states that standard reflects the national standard of care, essentially what a reasonably knowledgeable and skilled [insert specific profession here] would have done at the time in like and similar circumstances.

That “medical malpractice” standard of reasonable professional care, or of minimally acceptable professional care under the circumstances, traditionally has been quite distinct from the deliberate indifference standard for inmate medical claims first articulated in 1977 by the Supreme Court in Estelle v. Gamble, 429 U.S. 97, 104, when it concluded that “deliberate indifference to serious medical needs of prisoners constitutes the ‘unnecessary and wanton infliction of pain’ proscribed by the Eighth Amendment.” Traditionally, medical mal-practice claims were not only distinct from inmate medical needs cases, but were distant from them in terms of the level of proof required. As noted in Estelle, “[a] complaint that a physician has been negligent in diagnosing or treating a medical condition does not state a valid claim of medical mistreatment under the Eighth Amendment. Medical malpractice does not become a constitutional violation merely because the victim is a prisoner.” Estelle, 429 U.S. at 106. Only conduct “beyond gross negligence” will support a Section 1983 claim for deliberate indifference to a serious medical need. Id. While state-specific requirements for medical or professional malpractice claims still provide hurdles that many inmates simply cannot overcome, the trend in recent years is that the gap in proof required between these two types of claims is narrowing. As a result, particularly when there is a sufficiently serious injury, or a death, a plaintiff may file a lawsuit seeking to recover on either or both theories. That said, even when there is a high enough potential damage award to attract the involvement of sophisticated plaintiffs’ counsel, because the state-specific requirements for healthcare malpractice cases can be complex and may limit what those attorneys can do in pursuit of their client’s federal civil rights claim, given the “right” facts, even the most capable plaintiffs’ attorney may seek to recover exclusively under 42 U.S.C. § 1983 for violation of their clients’ federal rights despite the higher burden of proving not just professional negligence, but conduct “beyond gross negligence” that constitutes deliberate indifference to the inmate’s serious medical needs and the unnecessary and wanton infliction of pain.

State Specific Malpractice Requirements

Perhaps the most common of the state specific malpractice requirements is the required involvement of an expert qualified to testify regarding what the standard of care required of the healthcare provider in the situation and how the provider failed to meet that standard. The vast majority of states require expert testimony to prove a claim of professional negligence. See, e.g., National Conference of State Legislatures, June 24, 2014, Report “Medical Liability/Malpractice Merit Affidavits and Expert Witnesses.” The qualifications requirements, and other requirements for admissibility of expert testimony, vary widely from state to state. While there are other state specific requirements for healthcare malpractice cases (e.g., review boards, requirements that expert affidavits be filed with the Complaint, certificates of merit, damage caps unique to such claims, etc.), the requirement of expert testimony and the trend that the particulars of those requirements increasingly narrow the field of who can admissibly testify against whom all contribute to the complexity and expense of defending professional malpractice claims in the correctional healthcare context. The problem is compounded when the plaintiff pursues both causes of action, medical malpractice and deliberate indifference.

Civil Rights Allegations

Unfortunately, there is no uniform federal standard for what is deliberate indifference-instead we rely upon the evolving interpretations of the federal courts since Estelle, which can vary among jurisdictions. Although correctional healthcare providers are required to comply with the national standard of care governing their specific professions on the “outside,” they are practicing on the “inside” of the correctional system, with all that that entails. This puts them in a difficult position. Correctional physicians can be deliberately indifferent to an inmate’s (detainee’s or prisoner’s) rights by failing to prescribe needed medication and they can be just as deliberately indifferent to an inmate’s right to refuse to take needed medication. See, e.g., Johnson v. Tinwalla, 855 F.3d 747 (7th Cir., April 28, 2017). What controls in one jurisdiction may not apply in another. In Dang v Sheriff, plaintiff argued based on Kingsley, 576 U.S. __, 135 S.Ct. 2466, 2475 (2015), that a detainee alleging constitutionally deficient medical care need not show deliberate indifference. At least within the 11th Circuit, he does: “… Kingsley involved an excessive force claim, and we are not persuaded that its holding extends to claims of inadequate medical treatment due to deliberate indifference.” 856 F.3d 842, 850 (11th Cir., 2017).
Issues abound. A victorious plaintiff will be entitled to an award of attorneys’ fees on the federal claims, but may not be on the state professional or ordinary negligence claims. Although supervisor liability and respondeat superior liability may apply as to the state law claims, they do not apply to the federal claims.

Conclusion

First, from a risk management perspective these cases may be expensive to defend. In many of these lawsuits, individual healthcare providers, law enforcement, correctional officers and/or other governmental workers are named in addition to the entity providing their employment. The number of defendants insures a healthy bill and seems to be a more recent plaintiff ploy in forcing some providers to quickly settle. Besides sheer volume of named parties, these lawsuits can be witness intensive, with correctional officers from each shift of the relevant portion of the incarceration deposed. The lawsuits can easily be paper intensive, when plaintiff counsel asks for all policies and procedures of the correctional healthcare provider and all other parties. Second, begin with the end- most of these cases are resolved through summary judgment. Determine early what is necessary to defeat all causes of action pled in your case, and pursue the same. Another method to assist in the defense is to establish a correctional healthcare practice group, which includes overlap from medical malpractice, aging services, government and allied sciences. An established centralized data bank for useful orders, briefs, recent cases with precedent that deal with very specific areas of the law (i.e. custody, transport) should be utilized. Interaction with industry professionals in organizations such as the National Commission on Correctional Health Care, American Correctional Association, and American Jail Association can provide targeted and specific educational opportunities in matters unique to jails and prisons. This additional awareness of industry trends assists all involved in the defense of these lawsuits to understand the unique challenges associated with the interaction of civil rights and professional negligence claims.

]]>Risky Business – Skilled Nursing Facilities Under Attackhttps://wtools.io/code/raw/so?/2017/09/29/risky-business-skilled-nursing-facilities-under-attack/
Fri, 29 Sep 2017 06:12:39 +0000http://legalknowledgeportal.com/?p=7189Have you ever read a brochure for a resort, college, or apartment complex and expected everything it said to be completely and totally accurate without any caveats? In the Commonwealth of Pennsylvania, a chain skilled nursing facility is under attack for representations it made in its marketing materials.

In July of 2015, the Commonwealth of Pennsylvania, by its Office of Attorney General (“OAG”), filed a Petition for Injunctive Relief against Golden Gate National Senior Care, LLC’s Pennsylvania facilities (“Golden Gate”). The OAG asserted a claim under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa C.S.A. § 201-1, et seq., as well as claims for breach of contract and unjust enrichment. More specifically, the OAG claimed that Golden Gate engaged in unfair and deceptive acts and practices towards Pennsylvania consumers and the Commonwealth of Pennsylvania by: (1) making chain-wide misrepresentations in marketing materials; (2) making facility-level misrepresentations in its marketing materials, resident assessments/care plans and billing statements, presenting misleading appearances during state inspections, and creating false records; (3) making misleading statements about the level of care that would be provided to residents; and (4) failing to provide basic care.

In response, Golden Gate filed preliminary objections (Pennsylvania’s version of a motion for judgment based on the pleadings), contending that the UTPCPL was inapplicable, and the Commonwealth Court of Pennsylvania (Pennsylvania’s appellate court) agreed. It concluded that if “the Marketing Statements were offered and understood as an expression of the seller’s opinion only, which is to be discounted as such by the buyer, and on which no reasonable person would rely, they are puffery, and may not form the basis for a UTPCPL action.”

The court reasoned that “‘[m]aterial representations must be contrasted with statements of subjective analysis or extrapolations, such as opinions, motives, and intentions, or general statements of optimism, which constitute no more than puffery . . .’” Indeed, puffery is not actionable unlike false advertising. Two of the statements that the OAG took issue with were:

“We have licensed nurses and nursing assistants available to provide nursing care and help with [activities of daily living (ADLs)].”

“Snacks and beverages of various types and consistencies are available at any time from your nurse or nursing assistant.”

The court ruled that the first statement contains a “subjective analysis” and does not contain a false representation of specific characteristics of the services offered. For example, the OAG did not contend that Golden Gate does not have licensed nurses and nursing assistants to help residents with ADLs, instead it argues that Golden Gate does not have sufficient staff to render care. Because this statement made no representation that nurses will be immediately available to provide care or that it would be provided in a specific time frame, the court held it to be mere puffery.

Regarding the second statement, the court found it to be “broad, vague and commendatory language.” Indeed, the OAG did not assert that snacks and beverages were not always available from staff, but rather, that Golden Gate had insufficient staffing to timely respond to requests for snacks and beverages. Fortunately for Golden Gate, the court found this statement vague enough to qualify as puffery.

The OAG appealed the decision, and is arguing among other things, that the appellate court interpreted the scope of the UTPCPL too narrowly. It maintains the UTPCPL covers not only advertising but representations made about goods and services that create a likelihood of confusion or misunderstanding.

The case is currently pending before the Pennsylvania Supreme Court. Regardless of the outcome, skilled nursing facilities and the like should be put on notice about the representations made in their marketing materials. Pennsylvania has the fifth highest percentage of elderly residents in the country, and the Pennsylvania Supreme Court’s future holding can have national implications, as it would provide a roadmap for other States to prosecute under their respective UTPCPL. No matter in what state the facility is situated, the statements in marketing materials should always be accurate. In other words, it is not best practice to state that you provide a service that is unavailable or to promise that which you know you cannot consistently deliver.

]]>Alphabet Soup – Changes to the Affordable Care Acthttps://wtools.io/code/raw/so?/2017/08/18/alphabet-soup-changes-to-the-affordable-care-act/
Fri, 18 Aug 2017 12:56:59 +0000http://legalknowledgeportal.com/?p=7172With the new Trump administration and Republican control of Congress, there has been a lot of discussion about eliminating the Affordable Care Act and replacing it with a different set of rules. Legislation has passed the House but not the Senate, and it appears that legislative changes are going to be much slower than anticipated.

However, there are many other changes to the ACA that do not require legislation. Here are a few of those changes:

Rulemaking about coverage for contraception:
There have been several lawsuits about the requirement to provide contraceptive coverage if the employer is a religious organization or has moral objections. The Trump administration is in the process of issuing a broad rule that would permit for-profit companies (including publicly traded companies) to choose not to provide coverage for contraceptives if the company has a religious or moral objection. The effect of that will be that women covered under those policies may seek to be covered under a spouse’s policy or through the exchanges in order to obtain that coverage.

Shorter sign up window for 2018:
T0he administration has said there will be a 45 day window for sign up. There has been less advertising. Some commentators believe that this means fewer healthy people will sign up because only sick people will be persistent when it is more difficult to sign up. If this is true, it could further burden the exchanges.

More waivers for states.
Alaska has already been granted a waiver to create a reinsurance program to cover certain conditions. More states are likely to seek waivers to create their own programs and having more state choice is a feature of the House passed legislation.

Curbs on “special enrollment periods”
The exchanges have a once a year sign up period. In order to sign up outside that period, a consumer must have a “qualifying event.” Insurers believe that these have been too easily granted, allowing some people to sign up only when they need costly treatment. The new administration is enforcing these rules more strictly requiring proof of a qualifying event.

Use of brokers:
New rules this year now allow insurance brokers and insurers to handle the entire enrollment process for consumers obtaining insurance on the exchanges. Some welcome this change as making enrollment easier for consumers. However, some consumer advocates fear that consumers will not be informed about all of their options and that the brokers have a financial interest in steering consumers to policies that may not be the best choice. This new rule applies in the 30 states that participate in the federal marketplace but not to states that run their own marketplace exchanges.

Questions about enforcement:
There was already concern about the IRS enforcement of penalties when the IRS announced it would not reject ‘silent returns.” Those returns which do not indicate whether the person had qualifying coverage will eventually be matched against the Form 1095 database. However, many people think that the ACA is either going away or will not be enforced. Declining budget resources are also likely to mean less enforcement. We are likely to see mostly “passive enforcement” through data matching, rather than active enforcement through investigation or audits.

We should expect to see continued changes to the ACA as the new administration makes changes to rules, regulations, policy guidance and enforcement priorities.

University hospitals, hospitals, and medical practitioners in community practices are increasingly concerned with their own placement in the market. If they want to act economically, it is necessary to sell not only the necessary medical care, but also additional offerings, which are often common in wellness treatment centers. Hospitals, medical practices and care facilities carry out marketing, develop logos and try to present their brands in such a way that patients trust them and recognize them. The following article examines which principles need to be followed when building and protecting a brand.

Competition in healthcare

The competitive environment surrounding healthcare has radically changed in recent years. The healthcare fund, which is fundamentally regulated and funded by health insurance companies, cannot pay for many of the services available today, which go well beyond basic medical care. Further services are “sold” to the patient, often privately, by doctors and hospitals separately.

Medical and technical progress is increasing rapidly – as is the number of treatment options and the increasing specialization of the medical profession. At the same time, the requirements of the technical equipment of hospitals and practices are growing, which increases costs. This results in a fundamental, structural change in the healthcare landscape: Instead of doctors’ individual practices, community practices or medical care centers are increasingly forming. Hospitals are also increasingly being operated by large private carriers.

In this far more private environment, each hospital and medical practice, regardless of size and legal form, but also every nursing facility and every other provider of medical or nursing services, must stand up to the competition and position itself. A consistent and effective marketing strategy is therefore necessary.

Be a guiding light

It is important to be recognized by potential patients or clients and to be linked with certain values and/or special services. It is necessary to create a transportable image under one brand or, said another way, under one “roof”.

The brand is a sign that serves as a source of inspiration and quality for the company (hospital, practice, institution) or for a specific product or service of the company. The trademarks must be individually developed for each company and for each product, and the image, i.e. the brand message, which is to contain the sign, must be conveyed to the (potential) customer/patient.
The brand messages must be communicated in a clever way to make them known in the market and to enable them to be recognized again.

Trademark strategy:

A successful brand strategy makes an offer visible, conveys messages and allows for an identification with the values that the sign conveys. Patients should gain confidence through the positive perception of the brand and feel comfortable with the offer. They should have the feeling that they have found the right place for themselves and their health concerns.

Achieving this goal requires the development, protection and enforcement as well as communication of the brand directly to the desired target patient/customer.

a) Development of the brand:

First off, the development of a sign that can convey the desired brand message for the company or the product designated by the brand is necessary. To these ends, the following is required:

the development of a brand name,

the development of a trademark, and

the defining and designing of products and services.

Most hospitals and care facilities already have elements of a brand. Not infrequently, there is a name and a logo. These are also regularly used and communicated – for example on homepages, flyers, stationery and business cards. Often it is a sign for the entire company. The development of trademarks, or designs, for individual services or areas of a company is less common.

b) Protection and enforcement of the brand:

However, the protection and protectability of a trademark is often not sufficiently deliberated. Even if it seems logical to approach brand protection only after branding, this course of action carries risks. The legal requirements for registering the IPR should be taken into account when developing the brand name and logo. Otherwise, it may happen that a design, which has already been developed and established in the company, will be rejected in the application to protect the trademark. Much worse, though, there is hardly any way to deal with the use of the non-protected design by a third party.

Especially in the case of the (otherwise) successful development and use of a non-protectable logo/design, there is, in particular, the danger of being imitated and thus having to share the design’s luster.
The use of a self-developed design that has not been checked to see if any third party has the right to the design or parts thereof or to similar designs may be prohibited by third parties who can exercise their own rights to the design. In addition, the third party can demand a considerable amount of damages in certain cases.

Moreover, it is particularly important in the sensitive start-up phase of a brand to be able to protect the logo/design effectively against imitators. For registered trademarks, claims to stop the use of similar or similar designs are much easier to enforce than for unregistered designs. This is because, as a rule, for registered brands there is no need to provide separate evidence that the design is used as a company or product design. Such proof can be quite difficult with new non-protected logos or designs.

c) Communication of the trademark:

Last but not least, the designs and logos developed and optimized for a company and its products must be communicated, i.e. with the brand message they convey, to the potential patients. For this purpose, meaningful communication channels should be researched, through which appropriate communication of the trademark should take place as regularly as possible.

Practical tips:

To implement a brand strategy and effective brand protection, the following approach is recommended from the outset:

The protection of a design/graphic/logo should be examined and ascertained.

For effective brand protection, the classification of services, which must be specified later in the application, is already very important at the time of developing the design and the examination of its ability to be protected. It is a strategic decision that allows or restricts the brand in the future. The capability of a design to be protected must not only exist in the abstract, but specifically for the products and services for which the design is to be used. It is also crucial to assess whether the developed design infringes the rights of third parties. The definition of certain goods and services for which the brand is to be used is also crucial. In most countries there is a uniform classification system for the products and services (Nice Classification). For hospitals, medical practices and nursing homes, all essential services from the core activity areas are included in Class 44. This class covers services in the health and care sector. It is often useful to add additional services that are worth protecting for a facility outside the health and care sector. These could include, for example, training, education, social services, entertainment, sports and the like. These services are assigned to other classes and must also be entered in this way. The inclusion of these additional services is not only a legal requirement for brand protection, but also supports the definition of the brand image. For example, the service “professional training and training in the healthcare sector” simply implies the professional competence of the provider, which is important for branding. It is therefore always necessary to examine whether services from classes other than the main activity area of the trademark application are eligible. The determination of the services that are to be protected under the trademark is the most important component of a trademark application, in addition to the examination of the possibility for protection. The services provided determine ultimately the factual extent of the trademark protection. When the service directory (the classification) is created, it is also decided whether a trademark can be registered online with a slight fee reduction or whether the conventional application should be chosen by paper form. When registering online, services may be registered only with the terms used in the electronic database to designate goods and services. In the case of individually developed services, registration is recommended in paper form since, given sufficient clarity, it is also possible to define the terms of the services themselves. Thus, when in doubt, the services of the registering company or the product can be described more accurately than with the general terms stored in the database. The classification as the “heart” of a trademark should be made with the utmost care and, if possible, legal support.

To protect the company from claims for damages by other trademark holders, the potential infringement of foreign trademark rights by the proprietary trademark must be investigated and excluded. If a hospital or care facility violates the trademark rights of existing protected trademarks, claims for damages may result.

If the developed brand is “clean” after steps 1 and 2, a trademark registration is made to protect it effectively against infringement of trademark rights, in particular by preventing the utilization by third parties of already established brand contents and through the effective enforcement of the proprietary trademark rights.

If the trademark is registered, it must be communicated; that is to say, it must be used with content, since: The non-use of trademark rights entails the risk of deletion.

Last but not least, professional brand monitoring should be carried out here. As a trademark holder, you will be notified of whether your own brands are being infringed or whether an infringement is foreseeable. Only with this knowledge can trademark holders defend their own rights.

]]>What Does Medical and Recreational Marijuana Legalization Mean for the Commercial Insurance Marketplace?https://wtools.io/code/raw/so?/2016/12/23/what-does-medical-and-recreational-marijuana-legalization-mean-for-the-commercial-insurance-marketplace/
Fri, 23 Dec 2016 07:08:40 +0000http://legalknowledgeportal.com/?p=6832In connection with this month’s elections nationwide, ballots in nine states included initiatives to legalize the use of medical or recreational marijuana. All but one of the ballot measures passed.

With the relaxation of drug laws nationwide and dispensaries popping up rapidly, commercial property insurers have available to them amazing new business opportunities. This is especially so because dispensaries are aware they are at significant risk of theft and fire. Last week, Law360 explored this very topic, concluding that due to concerns resulting from the federal Controlled Substances Act’s listing of marijuana as a Schedule 1 drug, only a limited number of specialty insurers have entered this market.

Nonetheless, larger and more established excess and surplus insurers that are reluctant to enter the market due to uncertainty about the interplay between state and federal law should know this: There is already case law indicating insurers can pay benefits for marijuana losses. See Green Earth Wellness Ctr., LLC v. Atain Specialty Ins. Co., 163 F. Supp. 3d 821 (D. Colo. 2016). Hence, now is the time for insurers to at least consider developing a program or product tailored to the needs of marijuana business, as the U.S. marijuana market continues to represent a potential source of dynamic growth for insurers.

Below, we outline the results and some specifics of the marijuana initiatives voted on this year.

Arkansas voters passed an amendment to the state’s constitution, legalizing the distribution and possession of medical marijuana for any of 17 qualifying conditions. Notably, a similar amendment was struck down in 2012 in a vote of 51.4 percent to 48.5 percent, as compared to 53.2 percent to 46.8 percent in the 2016 election.

Florida voters passed the Florida Medical Marijuana Legalization Initiative in a vote of 71.31 percent to 28.69 percent. In short, the constitutional amendment legalizes medical marijuana for individuals with certain debilitating medical conditions as determined by a licensed Florida physician. This amendment becomes effective on January 3, 2017.

Montana voters passed the Montana Medical Marijuana Initiative in a vote of 57.64 percent to 42.36 percent. Notably, the new statute repealed a requirement that medical marijuana providers have three patients or fewer and allows doctors to prescribe marijuana to patients diagnosed with chronic pain or post-traumatic stress disorder.

North Dakota voters passed the North Dakota Medical Marijuana Legalization Initiative in a vote of 63.8 percent to 36.2 percent. The measure allows for the medical use of marijuana for certain defined conditions, including cancer, AIDS, hepatitis C, ALS, glaucoma, and epilepsy. It becomes effective on December 8, 2016.

Given the results of the November 8 election, medical marijuana is now legal in 28 states and the District of Columbia.

California voters passed the California Marijuana Legalization Initiative in a vote of 56.14 percent to 43.86 percent. Under the new statute otherwise known as Proposition 64, recreational use of marijuana for adults 21 years or older is now legal. Proposition 64, however, still imposes limitations on where qualifying adults may legally smoke and possess marijuana. This measure became effective on November 9, 2016.

Massachusetts voters passed the Massachusetts Marijuana Legalization Initiative in a vote of 53.57 percent to 46.43 percent. This statute allows adults 21 years and older to possess, use, distribute, and cultivate marijuana in limited quantities, thereby decriminalizing such activities. This measure will become effective on December 15, 2016.

Nevada voters passed the Nevada Marijuana Legalization Initiative in a vote of 54.47 percent to 45.53 percent. Following the passage of this statute, any person 21 years or older may purchase, cultivate, possess, or consume a certain amount of marijuana or concentrated marijuana and manufacture, possess, use, transport, purchase, distribute, or sell marijuana paraphernalia. Nevada’s statute becomes effective on January 1, 2017.

Maine voters passed the Maine Marijuana Legalization Measure in a vote of 50.17 percent to 49.83 percent. Adults 21 years and older may now possess, use, and transport marijuana in Maine. This measure will take effect 30 days after Governor Paul LePage proclaims the results of the election.

Since the November 8 election, there are now eight states — Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, and Washington — in addition to the District of Columbia, where recreational use of marijuana is legal.

Nevertheless, Arizona voters narrowly defeated its measure to legalize the possession and consumption of marijuana by adults 21 years and older in a vote of 51.78 percent to 48.22 percent. Although medical marijuana was legalized in 2010, recreational use in Arizona remains illegal.

]]>The Future of the Affordable Care Acthttps://wtools.io/code/raw/so?/2016/12/22/the-future-of-the-affordable-care-act/
Thu, 22 Dec 2016 07:04:38 +0000http://legalknowledgeportal.com/?p=6830Since its enactment six years ago, the Patient Protection and Affordable Care Act (the “ACA”) has faced numerous challenges from Republicans attempting to repeal the law. Though previous efforts, through both legislation and litigation, have been unsuccessful, the election of Donald Trump and a Republican-controlled Congress likely portends at least a partial repeal of the ACA. Now that Donald Trump has been elected as the next President of the United States, doctors, insurers, patients, and the rest of the country are asking what is next for the ACA. While there is no simple answer to this question, to better understand the potential future of the ACA, we must first delve into the key aspects of the ACA.

The ACA introduced a number of reforms designed to expand access to health insurance. First, the ACA initiated health insurance market places which allow small employers and individuals to compare and enroll in qualified health plans. Second, the ACA created the individual and employer mandates, which required nearly every citizen to obtain health insurance and employers with over 50 full-time employees to offer health care coverage to all full-time employees and their dependents. Third, the law created new spending programs to facilitate the overarching goals of the ACA. For example, the ACA included subsidies for middle-income Americans to help afford insurance premiums and implemented tax penalties for those that ignored the insurance mandate. The ACA also expanded Medicaid coverage, setting the family minimum income requirement at a higher percentage above the federal poverty level, meaning a greater percentage of individuals would become Medicaid-eligible (a prior court challenge made this portion of the ACA optional for states). Along with the fundamental changes to the healthcare marketplace, the ACA also implemented various other requirements relating to health insurance, including requiring that children up to age 26 be allowed to remain on their parent’s plans and prohibiting insurers from denying coverage to individuals with pre-existing conditions.

The coverage provisions of the ACA are perhaps the best known- and most controversial- portions of the law. The ACA did, however, bring about change in other aspects of healthcare. Most notably, the law created new health care payment and delivery models for physicians and patients including the Medicare Shared Savings Program (“MSSP”), which established Accountable Care Organizations (“ACOs”). ACOs are designed to decrease health care costs while increasing the quality of care for Medicare patients. ACOs attempt to achieve this goal by setting quality and performance benchmarks and rewarding physicians, hospitals, and other healthcare providers in the ACO for achieving those benchmarks at lower costs. The aim of this new payment model was to provide the health care industry with an alternative to the traditional fee-for-service payment system that Medicare has used for decades, and which has arguably contributed to inefficient spending within the program. The ACA also enacted various changes to healthcare fraud and abuse laws, including increased penalties and treating unreported overpayments as false claims.

The question still remains, can Donald Trump and congressional republicans make good on their promise to repeal the ACA, and if so, what changes can be expected?

There are two paths Republicans now have available to them to accomplish their long-standing goal of dismantling or repealing the ACA. The first and most unlikely path would be an outright repeal of the ACA. Accomplishing this would do away with all aspects of the ACA- not just doing away with the exchanges as well as the expanded coverage provisions and related subsidies and penalties, but the MSSP, changes to fraud and abuse enforcement, and other aspects of the law. To repeal the ACA entirely, both houses of Congress would need to pass a bill explicitly repealing the ACA that then-president Trump could sign into law. Though Republicans have a majority in both houses of Congress, they would likely need to obtain at least 60 votes in the Senate to prevent a Democratic filibuster of the repeal. Republicans will not have the necessary 60 votes to overcome a filibuster and Democratic leaders have openly stated that they would block any attempt to repeal the ACA, meaning achieving a complete repeal is highly unlikely (though not impossible).

There is, however, a far more tenable path for Republicans to effectively repeal the ACA. This path would be for Republicans to “defund” the law through a legislative process called reconciliation. Reconciliation allows federal budget bills to be approved in an expedited fashion with approval by only 51 votes in the Senate and a maximum of 20 hours of debate, eliminating the threat of a Democratic filibuster. Republicans have successfully used this approach in the past only to have the reconciliation bill vetoed by President Obama, something a President Trump is very unlikely to do. Though not a complete repeal, Republicans through reconciliation would be able to effectively repeal some of the provisions contained within the ACA. For a reconciliation bill to pass muster, each item proposed in the bill must be demonstrated to have a measureable and direct impact on federal spending. Therefore, only those programs in the ACA which impact the federal budget would be threatened. This means that provisions such as requiring insurers to cover young adults on their parents’ policies, preventing discrimination based on pre-existing conditions, the MSSP, and fraud and abuse provisions would remain in place. The most contentious provisions: the individual mandate; insurance exchanges; subsidies provided to moderate income Americans and the expansion of Medicaid to low-income uninsured individuals could, however, be effectively repealed.

In addition to reconciliation, a President Trump would have executive authority to achieve similar aims. Through Section 1115 waivers, the executive branch can allow states to severely modify Medicaid their criteria. These waivers could allow states to impose premiums, work requirements, and restraints on specific procedures (including reproductive medicine) if they so desire. Further, through Section 1332 waivers, individual states can modify their insurance marketplaces, feasibly eliminating mandates, exchanges, and cost sharing subsidies. Such waivers do require that the proposed program in the waiver improve patient’s access to high quality, affordable health insurance while retaining the basic protections of the ACA, presumably a Trump administration would have a distinct view on how states can achieve those goals compared to the outgoing Obama administration.

Though this has been a long-standing position of the Republican Party, its effect would be unclear. The ACA was designed to specifically balance the costs to private health insurers of extending coverage to high-risk individuals with pre-existing conditions against the premiums paid (and subsidized) by healthy individuals mandated to purchase insurance. While many- conservatives and liberals alike- would argue that this balancing act has at least partially failed, leading to higher premiums for all Americans to offset insurer’s costs, Republicans would almost certainly have to replace the defunded provisions with an alternative model that would offset the costs of the insurance industry, which upon a partial repeal would have all the high-risk individuals on their rolls without less healthy individuals to offset the cost.

The health insurance marketplace, will likely change radically. Though Donald Trump and Republicans have promised to “repeal and replace,” until we know what the replacement will be, we will not know how, exactly, the marketplace will change. The future of the rest of the ACA is equally uncertain.

]]>Caffeine’s Rise to Controversy and Popularity in Helping Consumers Attain Energyhttps://wtools.io/code/raw/so?/2016/10/24/caffeines-rise-to-controversy-and-popularity-in-helping-consumers-attain-energy/
Mon, 24 Oct 2016 05:52:55 +0000http://legalknowledgeportal.com/?p=6704Caffeine seems to have been around forever. I do not remember my first cup of coffee or my first can of cola, but I do remember the over-the-counter (OTC) stimulant drug products containing 200 mg of caffeine that were an absolute necessity for most of my classmates to survive freshman year of college and first year of law school. From all those years ago, how did caffeine become such a popular food and dietary supplement ingredient, and why is it now so controversial?

Ephedra may be to blame. In the late 1990s, ephedra was one of the hottest selling dietary supplements available. Frequently formulated with caffeine, ephedra was marketed primarily for energy and weight loss. Unfortunately, there were also reports of adverse events related to consumption of ephedra, and the media reported it was an unsafe product that needed to be banned.

In June 1997, FDA proposed a regulation to limit the serving size for ephedra-containing products, to 8 mg of ephedrine alkaloids per serving (in a six-hour period) and a total daily intake of 24 mg. At the time, 25 mg of ephedrine alkaloids per serving one or more times per day was standard (based on FDA’s regulation for asthma drugs containing synthetic ephedrine). Looking back, perhaps the industry should have supported the agency’s proposal, and ephedra could have remained on the market, albeit at a low serving size. Instead, industry opposed FDA’s efforts, and some companies continued to come out with products containing higher amounts of ephedra, caffeine and other stimulants.

It took FDA an additional seven years, but in February 2004, the agency issued a final regulation removing all dietary supplements containing ephedrine alkaloids from the market, declaring the products presented a significant or unreasonable risk of illness or injury. I imagine companies began to look for alternatives to ephedra at this time, which is why products such as Red Bull reportedly began U.S. sales in 1997, Rockstar Energy was launched in 2001, and Monster Energy was first sold in 2002. Since their inception, these market leaders and similar products have been successful with millions and even billions of dollars’ worth of sales annually.

But, it’s not just energy drinks; foods with caffeine are attracting attention as well. According to a letter sent to FDA by the Center for Science in the Public Interest (CSPI) on Nov. 16, 2012, caffeinated products include:

MiO water enhancer packaged in a squirt bottle with 60 mg of caffeine per squirt,

Crystal Light Energy with 60 mg of added caffeine,

Jelly Belly’s Extreme Sports Beans with 50 mg of caffeine per ounce,

Cracker Jack’d adult version of Cracker Jack with approximately 70 mg of caffeine per serving,

In addition, a consumer could make Wired Waffles with 200 mg of caffeine per waffle, pour on some Wired All-Natural Caffeinated Maple Syrup (168 mg of caffeine per 2 tbsp), add Steem peanut butter product, which claims 150 mg of caffeine per 2 tbsp, and have a very energetic breakfast. This meal would deliver quite a large amount of caffeine—probably more than anyone should consume in a day.

FDA has taken notice of the increasing amount of caffeine being added to a diverse array of products, and has expressed concerns. In April 2013, when Wrigley announced the launch of a caffeinated gum, FDA stated:

“The only time that FDA explicitly approved the added use of caffeine in a food was for cola, and that was in the 1950s. Today, the environment has changed. Children and adolescents may be exposed to caffeine beyond those foods in which caffeine is naturally found, and beyond anything FDA envisioned when it made the determination regarding caffeine in cola. For that reason, FDA is taking a fresh look at the potential impact that the totality of new and easy sources of caffeine may have on health, particularly vulnerable populations such as children and youth, and if necessary, will take appropriate action.”

Within about a week, after a series of discussions with FDA, in which the agency expressed concerns about caffeine appearing in a range of new foods and beverages, Wrigley announced a decision to pa

Not all companies have responded to FDA as quickly. In a Dec. 17, 2015 announcement, FDA expressed its concern about the marketing of a caffeinated peanut butter, which it noted was a food popular with many children. FDA stated the company, STEEM Peanut Butter Inc., had not submitted to FDA any information about the safety of its use of caffeine in its peanut butter product (reportedly 150 mg per 2 tbsp and 1,200 mg per jar). In its announcement concerning the caffeinated peanut butter, the agency stated:

“The FDA remains concerned about the increasing number of products on the market containing added caffeine and the possibility for harmful effects when multiple caffeinated products are eaten simultaneously, especially in products that are attractive to children. The FDA will continue monitoring the marketing of these novel food products in order to ensure public health and the integrity of the regulatory system designed to protect the food supply.”

FDA’s concern should at least be considered by anyone involved in the marketing of caffeine products. And it is not just marketers adding caffeine to a wide array of foods. Some companies have gone beyond what might be considered reasonable. The example of such action is the marketing of pure powdered caffeine, which FDA has taken steps to remove from the marketplace by issuing a number of warning letters.

As noted by FDA, the difference between a safe amount and a toxic dose of caffeine in pure powdered products is small. These products are essentially 100 percent caffeine, and a single teaspoon of pure caffeine is roughly equivalent to the amount in 28 cups of coffee. [link to] Obviously, a safe amount and a potential toxic amount of such a product could depend on a fraction of a teaspoon, which resulted in FDA determining such products “are dangerous and present a significant or unreasonable risk of illness or injury to consumers.”

The bottom line is with all of these caffeinated products readily available and the potential for injury, particularly among children, companies need to make careful decisions. This should not become a race to get as much caffeine into as many products as possible. Reports of serious injuries and even deaths have been purportedly attributable to caffeine energy products, and various news outlets have started to question the safety of these products. If this continues, the news media may further turn against such products creating a tidal wave effect, which could cause FDA to take action that might see many caffeine products go the way of ephedra.

]]>Can Health Care Professionals Terminate Patient Relationships After Being Sued?https://wtools.io/code/raw/so?/2016/10/03/can-health-care-professionals-terminate-patient-relationships-after-being-sued/
Mon, 03 Oct 2016 06:01:46 +0000http://legalknowledgeportal.com/?p=6685Usually when a patient sues a health care professional, the patient seeks health care services elsewhere. But that is not always the case. When the patient wishes to continue receiving services after suing a health care professional, it is not uncommon for the health care professional to wish to terminate the professional relationship. Traditionally, we have advised such health care professionals to ensure that the patient is not abandoned; the patient should receive services until he or she can find another provider for those services. A recent opinion in the U.S. District Court in the Southern Division of South Dakota shows that the question can be couched in terms of antitrust liability.

In Howes v. Yankton Medical Clinic, P.C., Connie Howes sued her late husband’s pulmonologist for negligent infliction of emotional distress, tortious interference with a business relationship, breach of contract, breach of fiduciary duty, conspiracy, unlawful tying in violation of section 1 of the Sherman Act, and monopolization of medical specialist care.

The decedent, Troy Howes, had been a patient of Dr. Alan Soosan, described by the court as a felon using an alias, who had performed unnecessary surgeries on patients. Dr. Soosan has since fled the country to Iraq. The Howes executed affidavits as witnesses against Dr. Soosan on May 16, 2014. The Soosan lawsuits against Dr. Soosan also named Dr. Michael Pietila, a pulmonologist, based on his participation in privileging decisions at Avera Sacred Heart Hospital, which had granted Dr. Soosan privileges to perform surgery despite some indications of Dr. Soosan’s inappropriate surgeries.

Troy was treated at Avera Sacred Heart Hospital in April 2015 by Dr. Pietila for sleep apnea. On May 5, 2015, Troy saw Dr. Pietila for sleep apnea at Yankton Medical Clinic, P.C. (YMC) in Yankton, SD. Dr. Pietila prescribed a BiPAP machine to assist Troy in breathing during sleep. Troy was unable to make it to a follow–up visit on August 3, 2015. Troy’s insurance carrier required such a visit to renew the order for the BiPAP machine.

Connie tried to reschedule the appointment, by YMC refused to do so. It insisted that the balance due on their account had to be paid in full, despite earlier arrangement to make small monthly payments. Troy’s Medicare and Medica coverage would have paid for the current visit. Troy died on September 22, 2015, allegedly due to the stress from his lack of access to treatment.

Other plaintiffs who later joined in the lawsuit against YMC also alleged that they were denied care at YMC due to their participation in the Soosan lawsuits.

The Opinion from the US District Court was issued in response to YMC’s motion to dismiss the antitrust claims.

When YMC denied care to the plaintiffs, the quantity of services available to them in the relevant market (Yankton County) “was zero due to YMC’s monopoly power.” The plaintiffs were found to have antitrust standing because they alleged that YMC used its monopoly power to deny them care so that it could gain an improper advantage in the Soosan litigation.

While an antitrust conspiracy could not be alleged to exist between Dr. Pietila and YMC, there was a third party involved: Avera. YMC claimed no control over the credentialing decisions at Avera, which were the basis for the Soosan lawsuits. So the motion to dismiss was denied on this basis, considering Avera as an unnamed coconspirator.

Illegal tying arrangements arise when two distinct products are tied and the defendant has sufficient power in the typing product market to restrain competition in the tied product market. Despite the absence of a second tangible product, the court found an adequate allegation of tying. “Although plaintiffs were not required to purchase a product or service in order to receive care at YMC, plaintiffs had to refrain from one product—filing medical malpractice suits—in order to receive another—specialist care.”

This case urges caution in terminating a professional relationship with a patient who files a medical malpractice lawsuit. YMC would have been well advised to follow guidelines from the American Medical Association, allowing a number of weeks to allow the patient to find alternative coverage prior to terminating the relationship. Under the court’s analysis, YMC might have been required to continue care for Troy Howes when he could not find alternative pulmonology services.

Since this is an opinion in response to pre-trial proceedings, we can only guess at the facts that will prove relevant at trial. However, it might be appropriate to first ensure that alternative coverage has been secured prior to denying further services. It might also be important to consider the patient’s ability to travel and local patterns and practices for referral for specialty services outside the community, if there are no other physicians practicing the particular specialty in the local community.

]]>LGBT Update: Five Things You Need to Know About the Transforming Workplacehttps://wtools.io/code/raw/so?/2016/08/12/lgbt-update-five-things-you-need-to-know-about-the-transforming-workplace/
Fri, 12 Aug 2016 06:12:32 +0000http://legalknowledgeportal.com/?p=6651We have all heard about the Obama administration’s directive barring employers and schools from gender identity discrimination and the battle over North Carolina’s law, known as H.B.2, which requires people to use bathrooms that match the gender listed on their birth certificate. But aside from the bathroom debate in North Carolina, there are other important developments in the area of LGBT rights that have gotten less attention but are equally important for employers and those who advise them to be aware of. Here are five things you need to consider in this rapidly evolving area of employment law:

1. Last year, OSHA published “A Guide to Restroom Access for Transgender Workers.” This publication offers best practices to employers to ensure the core principle that “all employees, including transgender employees, should have access to restrooms that correspond to their gender identity.” According to the OSHA guide, employees should be allowed to determine whether to use men’s or women’s facilities and should be provided other options, including unisex single-occupancy facilities or gender-neutral, multiple-occupant facilities with lockable single-occupant stalls.

2. If you are struggling to come up with workplace policies to address transgender issues, the Transgender Law Center may be a good place to start. Drawing from policies adopted by major employers such as Ernst & Young, Chevron, and the federal Office of Personnel Management, the Transgender Law Center has published a “Model Transgender Employment Policy” booklet, which includes sample policies for situations such as privacy, handling official records, transitioning on the job, locker room accessibility, dress codes, and health insurance, along with a sample workplace transition plan.

3. In January of 2015, the District of Columbia Office of Human Rights (OHR) initiated a research project to analyze how employers respond to resumes from applicants perceived as transgender compared to resumes of applicants perceived as cisgender. The study found that for transgender applicants, discrimination affected nearly every aspect of the interview process. Among the key findings:

48 percent of employers appeared to prefer at least one less-qualified applicant perceived as cisgender over a more-qualified applicant perceived as transgender.

33 percent of employers offered interviews to one or more less-qualified applicant(s) perceived as cisgender, while not offering an interview to at least one of the more-qualified applicant(s) perceived as transgender.

The applicant perceived as a transgender man with work experience at a transgender advocacy organization experienced the highest individual rate of discrimination.

The restaurant industry had the highest percentage of responses perceived as discriminatory among the employment sectors tested, although the sample numbers are low and therefore not conclusive.

Employers are advised to review their employment application processes and procedures to safeguard against disparate treatment of transgender applicants.

4. A 2015 report to assess major areas in which LGBT Americans face legal barriers, entitled “Understanding Issues Facing Transgender Americans” was prepared by the Movement Advancement Project, the National Center for Transgender Equality, and the Transgender Law Center. The report found:

17 states and the District of Columbia prohibit discrimination in public accommodations on the basis of gender identity, covering 36 percent of Americans.

18 states have clear laws prohibiting employment discrimination on the basis of gender identity or expression.

18 states and the District of Columbia have clear laws prohibiting housing discrimination on the basis of gender identity, covering 39 percent of Americans.

13 states have laws that clearly protect students from discrimination because of their gender identity and/or expression.

It should be noted that these statistics are changing daily as states enact bills to afford equal employment, housing, and other protections to members of the LGBT community. Employers need to stay abreast of legal developments in the states in which they do business in order to be sure they stay in compliance with the laws.

5. One of the first lawsuits filed by the EEOC seeking to apply Title VII protections to transgender employees was recently settled for close to $200,000. In another suit involving one of the EEOC’s first cases of sexual-orientation-based discrimination, the employer is mounting a vigorous defense. In that case, EEOC v. Scott Medical Health Center, 16-cv-00225 W.D.Pa., the employer has filed a motion to dismiss for failure to state a claim, arguing that Title VII does not apply to sexual orientation. That motion was filed on May 9, 2016 and since then, the EEOC and 14 amicus have filed briefs in opposition. Among the amicus are the American Civil Liberties Union, the Feminist Majority Foundation, and Lambda Legal Defense and Education Fund, a national non-profit organization committed to achieving full recognition of the civil rights of LGBT people. This is definitely a case to watch — as it is likely to set precedent as the issues move through the Third Circuit and possibly make their way to the U.S. Supreme Court.

Employment laws affecting LGBT workers are rapidly evolving and deserve our full attention to ensure that workplace policies, procedures, and cultures are responsive to — and in compliance with — the laws, guidelines, and enforcement strategies of the administration, the courts, and the various government agencies. It is always best to consult counsel to stay abreast of the developments in this area.

]]>Policies, Procedures And Protocols: Best Friend Or Worst Enemyhttps://wtools.io/code/raw/so?/2016/08/04/policies-procedures-and-protocols-best-friend-or-worst-enemy/
Thu, 04 Aug 2016 06:08:29 +0000http://legalknowledgeportal.com/?p=6638Long term care (“LTC”) facilities are obligated by regulation to implement policies, procedures and protocols (“PPPs”) on methods of practice and modes of providing care. PPPs in the hands of adverse counsel can prove problematic for facilities. Thus, certain measures can be taken to prevent use of PPPs against facilities.

LTC regulations of many states require that facilities promulgate policies on all aspects of their business, including record maintenance; personnel matters; physician, nursing, pharmaceutical, dietary, activities, social, and rehabilitation services; resident rights; quality assurance; and security. Most regulations require periodic review and update of these PPPs.

PPPs have been used in litigation against facilities for the purpose of asserting that failure to follow the PPPs constitutes standard of care violations. This litigation practice can be effectively limited or prohibited by careful drafting and regular updating of policies and by challenges in litigation.

In the standard negligence claim, a plaintiff must prove a duty and breach of the duty that proximately caused harm. In LTC cases, a typical negligence claim is that the facility had a duty to reposition residents to prevent development of pressure ulcers. The facility failed to reposition, breaching the duty. As a result of the breach, the resident developed pressure ulcers, suffered pain and died from sepsis. In this scenario, a plaintiff will request production of all policies, procedures and protocols on repositioning. The LTC facility’s policy provides that residents at high risk for pressure ulcers must be repositioned hourly. The generally recognized standards are that bed repositioning should occur every two hours and chair repositioning should occur hourly. In this hypothetical, the legal issue related to negligence duty is whether the facility was negligent by not following its internal PPPs which are a higher standard than the recognized standard of care in the LTC industry.

Courts across the country have handled this legal question differently. The Supreme Court of Virginia has held that internal rules cannot be the negligence standard or duty. The rationale applied is that facilities should not be penalized for aspiring to a higher standard. Conversely, facilities should not set standards lower than those recognized in their industry to avoid liability. When confronted with motions to compel production of PPPs, Virginia trial courts have decided in a variety of ways, but have held that PPPs cannot be used to form expert opinions on standard of care or negligence duty. When plaintiffs admit their intentions of having their experts use PPPs to opine on standard of care, most Virginia courts do not require their production. To avoid poisoning the well, other courts have ruled that experts cannot have access to PPPs until their opinions have been designated and they have been deposed. Some Virginia trial courts have ruled that PPPs can be produced, but cannot be provided to standard of care experts. A few Virginia courts have ruled that PPPs can be produced, and if the plaintiff provides those PPPs to standard of care experts, the plaintiff runs the risk of having those experts’ opinions excluded at trial.

LTC facilities can prevent use of their PPPs against them in several ways. Instead of placing higher aspirations in PPPs, aspirational goals may be better located in documents that are not PPPs or may not be in written form at all. Many LTC experts maintain that facilities should adopt only the regulatory standard or the well-recognized industry standard in the PPPs.

An additional concern for LTC facilities is use of PPPs in a later litigation against the same facility. To avoid this later use, LTC facilities required to produce PPPs can insist on a protective order limiting use of the PPPs to the current litigation and requiring return or destruction of the PPPs at litigation conclusion. Updating and re-dating PPPs annually can avoid their use in later litigation because the PPPs may not be from the relevant time frame.

Policies, procedures and protocols are necessary for operation of long term care facilities. When creating them, facilities should be very careful about their content and mindful of how they can be used in litigation.

]]>Joint Commission Updates Position on Texting Patient Ordershttps://wtools.io/code/raw/so?/2016/07/28/joint-commission-updates-position-on-texting-patient-orders/
Thu, 28 Jul 2016 06:13:19 +0000http://legalknowledgeportal.com/?p=6622The Joint Commission recently revised its position on physicians and licensed independent practitioners transmitting orders via text message. The Joint Commission’s new position allows physicians and licensed independent practitioners to send orders for care, treatment, and service via text message as long as a secure platform is used and the order includes all of the Joint Commission’s required components. The Joint Commission requirements apply to Joint Commission accredited facilities, but the new position serves as useful guidance to other facilities implementing policies, procedures, and secure platforms for orders sent and received on mobile devices via text message.

Previously, The Joint Commission prohibited the transmission of orders via text message due to information security concerns, the inability to identify the person sending the text message, and limitations on entering the order into the patient’s medical record. Secure text messaging technology has evolved, and many facilities and providers have piloted the use of secure mobile order technology. The Joint Commission’s new position states that text message orders may be allowed if the secure messaging platform includes the following components:

A secure sign-on process;

Encrypted messaging;

Delivery and read receipts;

Date and time stamp;

Customized messaging retention time frames; and

Specified contact lists for individuals authorized to receive and record orders.

Orders sent via text message must comply with Medication Management (“MM”) Standard MM.04.01.01, which addresses the required elements of a complete order. The Joint Commission also stated that organizations must address how text message orders will be documented in the patient’s medical record – for example, through direct integration between the secure messaging application and electronic health record technology or manual entry. As with any new technology that involves electronic protected health information, secure messaging technology must be included in an organization’s HIPAA security risk analysis. In addition, The Joint Commission recommends that organizations undertake the following steps when implementing text orders:

Develop an attestation documenting the capabilities of the secure text messaging platform;

Define when text orders are (and are not) appropriate;

Monitor how frequently text orders are used;

Assess compliance with texting policies and procedures;

Develop a risk-management strategy and perform a risk assessment; and

Conduct training for staff, licensed independent practitioners, and other practitioners on applicable policies and procedures.

The Joint Commission’s new position on text orders recognizes the evolution of health care technology. There are many steps that must be undertaken when piloting or implementing text messaging technology including performing risk analyses, development of policies and procedures, and training. Implementation of such technology should be approached thoughtfully, with input from providers, information technology and security personnel, and technology vendors.

]]>Technology Partnerships in HealthTech: a further explorationhttps://wtools.io/code/raw/so?/2016/06/15/technology-partnerships-in-healthtech-a-further-exploration/
Wed, 15 Jun 2016 06:00:28 +0000http://legalknowledgeportal.com/?p=6575The financial pressure on hospitals is increasing. Health insurers are becoming ever more critical of hospital expenses and also want to have more of a say on the content and quality of the care provision. Hospitals wish to continue to offer good care and for this they require access to state of the art technology, whilst they often do not have the financial resources to absorb the higher investment outlays required. In this area of tension, the suppliers increasingly offer capital-intensive imaging equipment or laboratory systems on the basis of a monthly all-in price in the form of a MES or Technology Partnership contract. What kind of contracts are these and what points deserve attention from a legal point of view? A further exploration.

Recently, the newspapers have been full of enormous ‘medical-tech deals’ news. For instance, some time ago it was reported that Siemens entered into a ‘contract for medical technology in Spain’ to the value of 132 million euro. Philips has become the technology partner of Karolinska University Hospital in Sweden. GE Healthcare and Toshiba are also entering into such contracts. Closer to home we also see more and more hospitals opting for such partnerships. This includes the Haga hospital in The Hague and the Reinier de Graaf Gasthuis in Delft where recently long-term MES contracts have been entered into.

MES contracts and Technology Partnerships: what exactly are they?

MES stands for Managed Equipment Services. There is no clear definition of what this exactly entails but when looking at the current definitions by the offerors of such contracts (such as Siemens, Philips, GE Healthcare and Toshiba), a common thread can be detected. In this type of contract, the unburdening of the hospital by the supplier is the focus and capital-intensive equipment, such as imaging equipment, is made available to the hospital for a long period of time (usually 10-15 years). Increasingly, the choice is made for leasing instead of buying. The lease payment not only includes the use, installation and maintenance, but also the replacement by new (state of the art) equipment from the partner or third parties. This service provision is often supplemented by services such as consultancy (process optimisation for instance) and/or collaboration in the field of R&D. There is also no fixed definition of Technology Partnership contracts (‘TP contracts’). This term is normally reserved for MES-type contracts, where there is no all-in price for example, or no full unburdening. Often in these types of contracts the use and further development of systems and R&D take a more central role.

Is it really a partnership?

Is this not just a clever way to bind a purchaser to a supplier for a long period of time? A partnership means giving and taking, doesn’t it? These are without doubt justified questions. A partnership assumes a balancing of mutual interests. The interest of the purchaser is basically to obtain certainty and to be able to continue to have access to suitable technology at predictable costs. The interest of the supplier is a long-term commitment and turnover certainty so it can make the necessary investments to continue to develop the technology. I can hear you wondering: in what sense is this different from a supply contract with a maintenance obligation? MES contracts go further than that. A proper MES contract is aimed at a permanent connection of technology and support to the needs to the hospital and that assumes a large degree of cooperation, coordination and flexibility.

Flexibility is essential

The emphasis is on the word ‘suitable’. That the purchaser has access to the latest technology is not in itself the most important element, but more that it has suitable technology which continues to meet its needs. Nobody can predict the future. Entering into a commitment for 10 to 15 years is a very long period, in particular if it relates to high-quality technical products. What technological developments are going to occur during that period? What is going to happen to the demand for care in the future? What needs are going to arise in the hospital? All these questions require that there is sufficient flexibility in place in all kind of fields without this compromising the interests of the supplier and the purchaser. That is where the challenge lies in these kind of deals. It is pointless to devise contractual provisions for all possible risks. That is simply not possible. Of course, clearly foreseeable changes or risks must be addressed in the best and detailed manner possible, always taking the parties mutual interests into account. In the box below you will find a number of examples of risks and how they can be addressed. It is in any event essential to work with a proper governance structure whereby the parties regularly keep each other up to date on the performance of the agreement as well as on developments in the short and long term (roadmaps for example) allowing the agreement to be amended in the interim if required.

New developments

Trends can also be observed in these types of contracts. Where a number of years ago these contracts started as purchase on-call contracts, latterly there has been an increase in the use of financed models (lease). There also appears to be an increasing wish to include R&D in the scope of these contracts. It also fits in with partnership idea to have the supplier benefit from knowledge of the hospital. Other interesting developments relate to the financing of property by these types of tech-suppliers (see Siemens in respect of Ommelander Group in Groningen for example). Last but certainly not least, suppliers are paying more attention to big data applications to develop systems which are able to support doctors to an ever increasing degree, which in turns leads to all kinds of challenges relating to privacy (personal data processing).

Conclusion

It may be clear that drafting, detailing, negotiating and performing these types of contracts is never a straightforward matter. MES and TP contracts are complex contracts in which very many different issues and disciplines converge. It is certainly not something to be taken lightly and it is essential that the hospital must have a clear long-term plan to which MES or TP can give substance. Nevertheless, these types of contracts do meet a clear need of hospitals. A clear trend can be seen over the past years where it concerns the increasing opportunities and willingness of suppliers and hospitals to work together towards better and more efficient healthcare. What will be the next step? Enough food for thought.

Important points for attention in MES and TP contracts

What is state of the art? A good definition is essential as there are different definitions in use such as ‘state of need’ and ‘state of innovation’. Do you want the newest of the new (including prototypes) or actually proven workhorses? Often a combination is chosen whereby a link is sought with the current requirements (key objectives) of the hospital.

Flexible replacement plan: It is important not to become locked into a replacement plan which is set when entering into the contract and possibly quickly no longer meets the requirements. What if the number of procedures suddenly drops or increases for example? Such market developments must be able to be provided for. It is therefore quite common to come to agreements on the earlier/later/less/yes/no purchase of previously anticipated systems.

Choosing third party systems: What if all of sudden a competing supplier brings a much better system on the market? It is very common in these types of contracts (up to a certain extent) to be free to purchase this competing system (Clinical Freedom of Choice) and that this system is maintained by the partner-supplier (Multi-Vendor Maintenance).

Leases are increasingly popular: Lately the choice has been more and more for lease constructions with a monthly fixed all-in price being agreed. Please note that from 2019 the interpretation of the lease (operational or financial) as regards the activation on the balance sheet is no longer important; on the basis of the new international accounting principles (IFRS) all lease obligations must be activated on the balance sheet. Also be aware that a move from ownership to lease may influence existing financing arrangements with the bank as their security will be cancelled and this affects the existing financing ratios.

Price developments: What happens in the event of price decreases or increases? Hardware has the tendency to lose its value quickly. Will this have consequences for the monthly all-in price? And, how do you determine the price of a piece of equipment in several years’ time? All kinds of agreements and safety valves must be incorporated to this end.

Come to practical agreements: Nobody is waiting for legal acrobatics. Remember that those who have been at the negotiation table will usually not be involved in the implementation of those agreements. Their successors have to be able to work with those agreements. The contract must be written for them.

]]>Finalized Medicare 60-Day Overpayment Rule Goes Into Effect Today – Providers Are You Ready?https://wtools.io/code/raw/so?/2016/03/24/finalized-medicare-60-day-overpayment-rule-goes-into-effect-today-providers-are-you-ready/
Thu, 24 Mar 2016 07:07:54 +0000http://legalknowledgeportal.com/?p=6453In 2010 the Affordable Care Act (“ACA”) implemented a 60-day reporting and refund requirement for Medicare overpayments.[1] Any provider that has received an overpayment is required to report and return the overpayment within “60 days after the date on which the overpayment was identified.”[2] An overpayment occurs when a provider “receives or retains” funds to which it is not entitled “after applicable reconciliation.”[3] Since the enactment of this rule, significant questions have remained regarding its implementation and enforcement, including when an overpayment is “identified.” CMS recently published its final rule providing clarifications of these questions and imposing additional obligations.[4] The final rule goes into effect today, March 14, 2016.

Why should providers care?

Provider non-compliance with the 60-day reporting rule has the potential to lead to civil liability under the False Claims Act (“FCA”), civil money penalties, and even personal criminal liability. In fact, the ACA specifically makes any overpayment retained by a person after the reporting deadline into an “obligation” under the FCA, subjecting a provider to potential reverse false claims liability.

What are some of the basic terms providers need to know about this new rule?

Identifying an overpayment: Crucially, the new rule clarifies what it means to “identify” an overpayment, which governs when the 60-day reporting clock begins to tick. Under the final rule, a provider identifies an overpayment when it “has, or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.”[5] This update is a significant change from the proposed rules as it acknowledges the need for reasonable assessment. It is now clear that providers have reasonable time to quantify an overpayment before the 60-day reporting clock begins to tick, as long as they exercise reasonable diligence.

Reasonable diligence: In the majority of cases “reasonable diligence” means an investigation concluding no more than 6 months from receipt of credible information of an overpayment. To be credible, information must support a reasonable belief that an overpayment may have been received.

Whose credible information: The new rule does not limit the sources of potential credible information. A provider may be found to have “knowledge” of an overpayment if any of its employees or agents, at any level of the organization, have knowledge. Based on the comments and responses to the new rule, potentially credible information may also come from a source outside the provider-organization, including from third-parties involved in Medicare billing. If anyone at the provider has credible information of a potential overpayment, it must investigate—using reasonable diligence—to determine if an overpayment occurred. In contrast, if someone at the provider had credible information, but no investigation was conducted—or it was not conducted in a timely manner—the provider may be exposed to liability because it “should have” determined it received an overpayment.

Provider’s Duty of Diligence: The new rule makes clear that providers may incur liability if they hide their heads in the sand. While the new rule does not mandate any particular compliance program, it makes clear that providers have a proactive duty to constantly examine whether they have received an overpayment from Medicare. If they do not, they may be at risk for liability based on the expiration of the 60-day reporting rule.

Diligence Extends Over 6 years: The new rule includes a “lookback period” of 6 years. Where a provider determines an overpayment exists, and that overpayment could have been recurrent, the provider must investigate back 6 years.

What should providers consider based on the final rule?

Do we have a policy and procedure regarding Medicare overpayments?

Do we investigate potential Medicare overpayments?

Do we have a procedure for documenting investigations into potential overpayments?

Do we have an appropriate record retention policy and procedure?

Do we have a compliance program to review Medicare billing and payments?

Do we have a system for reporting potential overpayments within our organization?

Do we need to conduct training on the requirements of the 60-day overpayment rule and reporting?

How might senior care providers specifically be effected by this new rule?

Medicare overpayments may arise in multiple, varied situations among providers, including the more obvious situations involving coding and billing. But, senior care providers may also encounter potential overpayments as a result of, among other things, staff eligibility issues, population-specific factors, or regulatory actions. For example, a provider may have billed for the services of an excluded staff member without knowledge. If the provider then receives information that its care staff was excluded it may trigger a responsibility to engage in reasonable diligence. Another example might arise when a provider’s billing staff identifies that the date of service of a claim post-dated the date of a resident’s transfer/discharge. The application of the 60-day rule may also arise after regulatory action, such as DPNA pending a re-survey. Moreover, because the size of senior care providers varies significantly, providers may have questions regarding the scope of compliance, reporting, and diligence required.

The final rule provides much needed clarification, but also puts significant responsibilities on providers. While the new rules may seem daunting, especially to those operating smaller senior care homes, the potential consequences of hiding from the requirements are severe. It is important that providers not hide their heads in the sand, but meet this new rule with their faces forward and their policies ready for compliance.

The application of the 60-day rule is fact dependent and may appear in varied situations. Providers should seek counsel if questions arise.

]]>Hospice Providers – Step Up to the “MIC”https://wtools.io/code/raw/so?/2016/03/16/hospice-providers-step-up-to-the-mic/
Wed, 16 Mar 2016 10:15:44 +0000http://legalknowledgeportal.com/?p=6443After a period of relative calm on the audit front, many signs point to an increase in audit activity. According to the Program Integrity Section of the Division of Medical Assistance, a Medicaid Integrity Contractor (MIC) will begin audits of North Carolina Medicaid hospice providers soon. Is your agency ready for this increased audit environment?

What is a Medicaid Integrity Contractor?
The Deficit Reduction Act of 2005 established the Medicaid Integrity Program under Section 1936 of the Social Security Act. It required the Centers for Medicare and Medicaid Services (CMS) to contract with entities to: conduct reviews of Medicaid provider actions; audit claims; identify overpayments; and educate providers and others on payment integrity and quality of care. A Medicaid Integrity Contractor (MIC) is the name for the private entity that contracts with CMS to perform these functions. There are three types of MICs: Review MICs; Audit MICs; and Education MICs. Review MICs conduct data mining analysis and risk assessments of Medicaid claims data. Audit MICs conduct post-payment audits of Medicaid providers and identify overpayments. The audit ensures that claims are paid in compliance with Medicaid rules and regulations and that claims paid are medically necessary. Education MICs educate providers and others on matters regarding payment integrity and quality of care issues.

What is the likely MIC audit process?
A provider can be selected for a MIC audit based on either data analysis performed by a Review MIC or by referral from a state agency. After a provider is selected, the Audit MIC will send a Notification Letter. Audit MICs conduct both desk audits and field audits. During a desk audit, the provider sends its documentation to the Audit MIC who reviews the records at its office. A field audit occurs when the audit is performed at the provider’s location. For a field audit, there will most likely be an entrance conference for the MIC to explain the objectives of the audit and to also attempt to answer questions from the provider. At the conclusion of the on-site field audit work, the MIC may conduct an exit conference with the provider to offer general observations about any audit findings. The most recent version of the CMS Medicaid Program Integrity Manual provides for a five year look back period which begins from the start of the audit, which is the date the engagement letter is sent. If after a review of the records, the MIC finds a potential overpayment, it will prepare a draft report shared with both the State Medicaid Agency and the provider for comment. After the report is finalized, the Audit MIC will send it to the State Medicaid Agency which will pursue the collection of any overpayment and adjudicate any appeals based on state law.

What will be the focus of the audit?
The specific areas of focus for the hospice audits have not yet been disclosed. However, hospice audit topics in other states have recently included length of stay and compliance with state and federal Medicaid policy and regulations. Here in North Carolina, the Medicaid hospice benefit is governed by Clinical Coverage Policy No.: 3D which incorporates many of the federal regulations that govern the Medicare hospice benefit (42 C.F.R. Part 418). We would be more specific with potential topics if we could, however, that is the information available at this time.

Besides the potential audit topics already mentioned, a recent CMS publication from the Hospice Toolkit, Program Integrity-An Overview for Medicaid Hospice Providers, addressed several overpayment trends from various state and federal audits. These include a lack of documentation to support a terminal illness with a life expectancy of six months or less, failing to certify in a timely manner, hospice employees not properly vetted or licensed, documentation that supported long-term or custodial care rather than hospice care, and issues with the principal hospice diagnoses on claims.

Increased awareness and understanding of previous audit topics can help to prepare for an upcoming audit, and conducting your agency’s own internal compliance program.

Can the results be appealed?
An appeal of an overpayment from a MIC audit is governed by state law. In North Carolina, a provider that receives a notice of overpayment should have the opportunity to request a reconsideration review with DMA and file an appeal with the Office of Administrative Hearings. Even though DMA will not have conducted the MIC audit, it will be responsible for defending the audits during an appeal.

Are you ready?
So, what does this mean for North Carolina hospice providers? The Audit MIC for North Carolina is Health Integrity, LLC. According to DMA, the MIC audits will commence in the next four to six weeks. If you are contacted regarding an audit, review the letter carefully. If you have questions, contact the auditor to clarify.

If the letter instructs you to provide or produce records, review the request closely. Identify all relevant records being requested for the beneficiary and the date of service. Before providing documents to the auditor, either by mail or on-site, verify the records are complete and are organized so the auditor can easily locate the information. Don’t forget to make copies of any records you send to the auditor. Documentation is crucial for a post-payment audit, and a MIC audit is no different.

Also, make sure that you know and monitor the applicable timeframes for the production of records and for an appeal. A missed deadline can lead to adverse audit findings, create additional issues, and cause your agency to spend more time and effort than is necessary while distracting from patient care.

The impending MIC audits and recent updates to the CMS Program Integrity website regarding the hospice program are clear signs audit activity will increase. Providers should be on notice and plan ahead.

]]>Five big things that have changed since you adopted your compliance programhttps://wtools.io/code/raw/so?/2016/03/04/five-big-things-that-have-changed-since-you-adopted-your-compliance-program/
Fri, 04 Mar 2016 07:23:44 +0000http://legalknowledgeportal.com/?p=6439Vintage clothes, vintage wine and vintage cars are all great, but not vintage compliance policies. So what has changed that makes it vital for compliance policies and activities to be updated now?

Updates to Compliance Guidance.
The original compliance program guidance document was published in 1998 for hospitals, followed closely that same year by guidance for clinical laboratories. The OIG has been rolling out additional guidance ever since for a variety of provider and supplier types. The guidance for hospitals and nursing facilities was supplemented in 2005 and 2008 respectively. In addition, the OIG speaks through its Open Letters, Fraud Alerts, Special Advisory Bulletins, Advisory Opinions and the annually published OIG Work Plan. All are available under “Compliance,” “Fraud” and “Publications” selections on the OIG’s website www.oig.hhs.gov. The letters, alerts, bulletins and work plans identify specific areas of concern, auditing and investigation.

The various forms of guidance and OIG communications have all more recently been emphasizing assessment of compliance risk, increased board education and involvement and evaluation of the compliance program itself.

Dramatically Raised Expectations for Governing Boards.
The recently published Practical Guidance for Health Care Governing Boards on Compliance Oversight (April 20, 2016), was developed by the OIG in collaboration with the Association of Healthcare Internal Auditors, the American Health Lawyers Association and the Health Care Compliance Association. This publication emphasized an active role of the governing board in compliance more strongly than ever before. The Guidance states expectations of boards to be questioning and well-informed about compliance; seeking specific reports from management and the compliance, audit and legal functions as well as actively evaluating the compliance program. With its probable origins in the Caremark case’s director duty of care discussion, the Guidance is representative of other developments—increased investigation and prosecution of individuals for their role in health care fraud and abuse, and the recent initiation of oversight requirements and certifications from governing boards in corporate integrity agreements.

The Risk of Being Audited and Investigated Has Increased Significantly as More Resources are Dedicated to Auditing and Enforcement.
Starting with HIPAA (increased compliance funding) and the Deficit Reduction Act in 2005 (Medicaid Integrity) and continuing through the Affordable Care Act, significant new financial resources have been directed to detection and prosecution of health care fraud and abuse. A new generation of audit contractors are actively investigating healthcare fraud in both the Medicare and the Medicaid programs. Fueled by information obtained in part from electronic billing, various government agencies now regularly use “big data” to detect not only outliers, but also to monitor potentially suspicious patterns of billing activity.

Establishment of Public/Private Coalitions and Communication.
Older compliance policies and procedures tend to emphasize compliance with federal payers’ billing and rules. However, more recently, a growing number of commercial payers have established “integrity” programs to address non-compliance and potential fraud. The Affordable Care Act established pathways of federal and commercial payers to cooperate and communicate in detecting and investigating billing non-compliance and fraud. Updated compliance policies and procedures need to address relationships with all payers.

Old Compliance Infrastructure May Be Outdated or Ineffective.
The trend has been for regulators to expect compliance systems and the related infrastructure to become increasingly sophisticated and robust. For example, when evaluating compliance programs for purposes of determining whether or not a corporate integrity agreement will be required, the OIG expects: (i) reporting lines to be truly anonymous which generally means using a third party vendor; (ii) larger organizations are expected to have a written plan for the interaction and coordination of legal, audit and compliance functions; (iii) human resources functions need to be incorporated into the compliance model and (iv) all employees need to be sufficiently educated to be able to respond to questions about the compliance program posed by auditors or investigators.

Convergence Between Quality and Compliance.
Quality and reimbursement, thus compliance, are being linked in ever-expanding ways. So also, the quality impact of compliance issues should be addressed in investigations and corrective actions. Policies and procedures must connect quality with compliance in meaningful ways.

All of this means that your compliance officer and committee should be carefully reviewing the current compliance policy and procedures and considering significant updates for the new generation of compliance expectations.